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American Job Centers

 

Enterprise Zone Tax Credit - A Maryland State Tax Credit for Employers

 

What is it?

A one-to-three year Maryland state tax credit available to employers in the designated Enterprise Zones who hire for newly created full-time jobs. A one-time credit for each new employee and a three-year credit for hiring an employee who is economically disadvantage (as determined by the Maryland Job Service). The credit is:

Economically Disadvantaged New Hires or Rehires who have been laid off a year or more:

  • 1st Year: $ 3000
  • 2nd Year: $ 2000
  • 3rd Year: $ 1000

Focus Area Employees within the Enterprise Zone:

  • 1st Year: $ 4500
  • 2nd Year: $ 3000
  • 3rd Year: $ 1500

New Hires Who Are Not Economically Disadvantaged:

  • $1000 credit per new worker - $1500 if in a focus area within a zone
  • In order to receive the full $6,000 tax credit, the individual must remain in the position for 3 years. If the individual leaves and another individual who is economically disadvantaged is hired in the position, the employer may take the remainder of the credit as if the original employee remained.

Who qualifies

An employee who is:

  • hired after the business was located in the Enterprise Zone, or after the zone was created, whichever is later
  • employed for at least 35 hours each week for 6 months, before or during the taxable year for which the tax credit is taken
  • spending half of all work time in the zone or in an activity related to the zone
  • hired to fill a new position, or replacing someone who is also economically disadvantaged; the employer’s number of full-time positions must increase by the number of credits taken
  • a new employee or an employee rehired after being laid-off by the business for more than one year

The Employer May:

  • Claim an unlimited number of employees.
  • Claim the tax credit along with the Federal Work Opportunity Tax Credit (WOTC) Federal Empowerment Zone Tax Credit, and the Maryland Employment Opportunity Tax Credit (EOC).

The Employer

  • The employer must pay a wage equal to at least 150% of the federal minimum wage.
  • The employer must be certified by the local zone administrator to be eligible for the tax credit.
  • Once certified, the employer completes Part II of the Tax Credit Voucher and returns the completed Voucher to DLLR.

The Certifying Agency

  • The local economic agency will review an employer’s application for the Enterprise Zone tax credit eligibility and provide the employer with a letter of certification if it is eligible.
  • Upon receipt of the Tax Credit Voucher, DLLR will certify the job seeker as eligible for the tax credit.
  • If eligibility is approved, DLLR will send a Tax Credit Employer Certification form to the employer.

Authorization

Created in the General Assembly in 1982, under Article 83-A5-301, Urban Enterprise Zones.

Where to go for more information
Department of Labor, Licensing and Regulation (DLLR)
Belinda Duncan
Tax Credit Program Administrator
1100 N. Eutaw Street, Room 201
Baltimore, MD 21201
Telephone: 410-767-2047
Fax 410-767-2078