Maryland shows an average deal value of $4.63 million with 169 new jobs created per deal
ONE MARYLAND TAX CREDIT
The One Maryland Tax Credit Program provides two income tax credits to businesses that initiate major investment projects in Maryland’s most economically distressed jurisdictions. The Project Tax Credit can be as much as $5 million on qualified costs for construction or acquisition of a site for an economic development project. The Start-Up Tax Credit can be as much as $10,000 per net new job created. The total amount is based on the eligible costs of relocating a business from outside Maryland. Eligible costs include office equipment, office furniture, telecommunications, and computer equipment.
In order for a business to be eligible for the One Maryland Tax Credit, they must:
- Create at least 25 net new jobs in 24 months
- Be an eligible activity e.g., manufacturing, warehousing, financial services, back office)
Businesses have up to 14 years after the tax-year in which the project was placed in service to claim the credits. In years 1-5, businesses may apply credits to Maryland income tax liability. In years 6-15, businesses may apply credits to income tax liability, and, in addition, claim a refund against payroll withholding of qualified employees.
JOB CREATION TAX CREDIT
Certain businesses that create new qualified positions in Maryland may be eligible for tax credits based on the number of qualified positions created or wages paid for these positions. The credit is 2.5% of aggregate annual wages for all newly created, full-time jobs - $1,000 per new job. In a revitalization area, increased to five percent of annual wages, up to $1,500 per new job. Credits cannot exceed $1 million per credit year. If the credit is more than the tax liability the unused credit may be carried forward for five years.
The business facility must be certified as having created at least 60 qualified positions, 30 high-paying qualified positions, or 25 qualified positions if the business facility established or expanded is in a Maryland Priority Funding Area. The positions must be filled for 12 months. Additionally, the facility must be engaged in an eligible activity. The Job Creation Tax Credit remains in effect until January 1, 2020, subject to extension by the Maryland General Assembly.
ENTERPRISE ZONE TAX CREDIT
Businesses located in a Maryland Enterprise Zone may be eligible for income tax credits based upon wages paid to qualifying employees. There are two types of income tax credits for firms in an enterprise zone; a general income tax credit and a larger income tax credit for hiring economically disadvantaged employees.
The business must hire at least one employee who:
- Is a new employee or an employee rehired after being laid off for more than one year;
- Worked for the business for at least 35 hours per week for six months or more;
- Earns at least 150% of the federal minimum wage;
- Spends at least 50% of the workday either in the enterprise zone or on activities of the business resulting from its location in the enterprise zone or focus area;
- Hired after the date the enterprise zone was created or the date the business located in the enterprise zone or focus area, whichever is later; and
- Is not hired to replace an individual employed by the business within the last four years.
The income tax credit is $1,000 for each qualified new employee filling a newly created position in an enterprise zone, or $1,500 for each qualified new employee in a focus area. The tax credit for economically disadvantaged employees is for a three-year period for each qualified employee, earned at the following flat rates:
In order to receive the full tax credit, an economically disadvantaged employee must remain in the position for three years. However, if the disadvantaged employee leaves the firm and is replaced by another employee who is also certified as disadvantaged, the firm may take the remainder of the credit as if the original employee had remained.
If the credit allowed in any taxable year exceeds the State income tax for that taxable year, a business entity may apply the excess as a credit against the State income tax for succeeding taxable years until the earlier of the full amount of the excess is used or the expiration of the 5th taxable year from the date on which the business entity hired the qualified employee to whom the credit first applies.
OTHER MARYLAND INCENTIVE PROGRAM
- Cybersecurity Investment Incentive Tax Credit
- Research and Development Tax Credit
- Biotechnology Investment Incentive Tax Credit
- Brownfields Tax Incentive
- BRAC Revitalization and Incentive Zone Program
- Cellulosic Ethanol Technology R&D Tax Credit
- Employer Security Clearances Costs Tax Credit
- Maryland Wineries and Vineyards Tax Credit
- Maryland Film Production Tax Credit
- Maryland Venture Fund
- Invest Maryland
- Challenge Investment Program
- Maryland Economic Development Assistance Authority Fund
- Maryland Innovation Initiative
- State Small Business Credit Initiative
- Community Development Block Grant Program