Maryland’s Job Creation Tax Credit

April 29, 2010 | Subscribe to our RSS Feed

Maryland businesses that hire workers for newly-created or vacant positions may be entitled to a Maryland tax credit (on top of the federal HIRE credit). The amount of the tax credit is based on the number of employees hired and their tenure.

The tax credit may be taken against corporate income tax or personal income tax. The same credit may not, however, be applied to more than one tax type.

To qualify for the Maryland tax credit:

All employees must be Maryland residents hired between March 25, 2010 and December 31, 2010. At the time of hire, individuals must be receiving unemployment insurance benefits or have exhausted their benefits in the previous 12 months and not working full-time immediately preceding the date of hire.

The new jobs must be:

• full-time;
• jobs that require an employee to be employed without interruption for 12 months or more;
• located in Maryland; and
• newly created or have been vacant for at least 6 months.

The business must certify each employee with The Department of Labor, Licensing and Regulation (DLLR) by submitting an online application.

How the tax credit is calculated:

The credit allowed depends on the number of months the employee was in the position. The credit is $5,000 multiplied by the number of employees hired by the employer between March 25, 2010 and December 31, 2010.

The amount of credit that may be claimed in each year is prorated based on the number of employees and number of months employed during the businesses’ taxable year. Employers will multiply $416.67 by the number of months an employee was employed during that year and claim that amount on their return.

The total tax credit cannot exceed $250,000 for any employer under this program. The amount in excess of the state tax liability may be refunded. The total amount of credits approved by DLLR each year is limited; initial credit certificates will be issued on a first-come-first-served basis.

For more information, visit http://www.dllr.state.md.us/taxcredit/jcrtcflyer.pdf

Submitted by Tammy Schneider

Questions?

tammy.schneider@glassjacobson.com