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How do I find qualifying employees?
Contact your local One-Stop
Career Center through to reach the business representatives
in your area who are working with Unemployment Insurance (UI)
claimants. Some UI claimants may also have registered with the Maryland
Workforce Exchange.
How can I be sure that a prospective
employee is collecting or has received Unemployment Insurance?
- Upon request, most UI claimants will have a Citibank debit
card with the Maryland blue crab that is issued by DLLR’s
Division of Unemployment Insurance or an IRS form 1099
issued by the UI Division. after an online application is
received, DLLR will verify this and other information.
What if the employee leaves my employment?
- If a qualified position certified under this tax credit
program is vacated for any reason prior to the expiration of
the12 month period, the employer must immediately notify
DLLR's Tax Credit Programs Unit.
- A qualified employer must submit an amended application in
order to receive the tax credit for hiring a replacement
qualified employee for the vacated position.
How do I claim the credit?
- Each employer may receive a maximum credit of $5,000, for
each qualified employee, up to a total of $250,000
- The credit may be claimed on the employer’s tax return
that covers the time that the position is filled; positions
filled for less than the twelve-month maximum provide the
employer with a pro rata credit of $416.67 for each month
that the position is filled.
- If the credit exceeds the employer’s income tax
liability for that year, the employer is entitled to a
refund payment.
- A non-profit organization may apply a credit against
unrelated business income taxes and may receive a refund if
the credit exceeds that liability.
Q: Can the tax credit be taken concurrently with
other federal and state tax credit programs?
There is nothing under this tax credit that precludes you from applying
for other similar state or federal tax credits. Employers should check
with their tax advisors regarding the specific rules for other tax credit
programs.
Q: How can I be sure that my employee or the person I
am interviewing is collecting UI benefits or has exhausted benefits in the
last 12 months?
- Federal law prohibits DLLR's UI Division from providing this
information at the employer's request.
- However, the employee/interviewee can fax a written request for
verification of their UI status to:
- 410-333-5142 (FAX) or
- Mail it to 1100 N Eutaw St. Room 208 Baltimore, MD 21201 Attn:
Claimant Status Verification
- They should include their name and Social Security Number
- The request should indicate where the verification will be sent,
either to a fax number or a return mail address.
- As long as the written request made by the employee/interviewee
authorizes it, the verification can be returned by fax or mail to
the employer.
Q: What if my employee/interviewee is collecting UI
benefits or has exhausted benefits distributed through another state?
- Under the Hiring Incentive Rebate for Employers program, an employee
is qualified if they are a Maryland resident and collecting UI
benefits from another state.
- Because our on-line verification cannot automatically check this
information, any employer in this situation should fill out a paper
application. Please email taxcredit@dllr.state.md.us
or call 410-767-2996 to request a paper application.
- Mail or fax completed applications to:
DLLR Tax Credit Program
1100 N. Eutaw Street, Rm. 201-203
Baltimore, Maryland 21201
410 -767-2060 (FAX)
- Upon receipt of the paper application, we will verify the
out-of-state claim and e-mail you the results.
Q: How can I specifically seek out potential
employees who would allow me to claim the credit?
- The Maryland Workforce
Exchange, the online employment site operated through DLLR's
One-Stop Career Centers, will allow you to post your job opening with
a stated preference for eligible UI claimants. Answer "Yes"
to the question "Employer seeking eligible UI claimant [Yes/No]
(Maryland Job Creation & Recovery Tax Credit)".
- Likewise, job seekers through the Maryland
Workforce Exchange will be able to find employers who are seeking
eligible UI Claimants.
- Contact the Business Service Representatives at your area One-Stop
Career Center. You can find out how to contact your local center at
the One-Stop Career Center web page
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Q. Can laid-off, former employees, who are now collecting unemployment benefits, be "rehired"
and still considered for this tax credit?
Yes. The tax credit is available for newly created positions or positions which have been vacant for six
months or more. So long as a position is newly created or has been vacant for six months or more and the
other requirements of the law have been satisfied, the credit would be available for a position filled by
a former employee who was laid off.
Q. We are a manufacturing company which plans to bring back employees after extended layoffs.
If we apply and then have to layoff prior to the 12 month period, what happens?
The tax credit is available to a qualified employer for a qualified position that is expected to last
indefinitely and without interruption for a period of 12 months or more. The credit is not available for
temporary positions or those positions that an employer expects will last for fewer than 6 months.
Companies are expected to be honest with their expectations - if you do not have a reasonable belief that
the position will last indefinitely, you may not claim the credit.
If, due to unforeseen circumstances, an employer hires a qualified employee for a qualified position
and the position does not last longer than 12 months, the employer would be entitled to the credit
pro-rated for the months for which the qualified employee was actually employed.
Q. Can you please tell me if our organization is eligible for this program if we are a
tax-exempt non-profit?
The tax credit is available to organizations exempt from taxation under § 501(c) of the Internal Revenue
Code. The credit may be applied against State income tax due on unrelated business taxable income.
Q. What is considered to be a full-time position? What is considered to be a part-time position?
Neither full-time nor part-time is described in the tax credit law. However, for purposes of this tax
credit, DLLR considers full-time work to be work in excess of 35 hours per week.
Q. How does this program relate to the Federal HIRE tax incentive program?
This tax credit is available pursuant to Maryland law and involves a credit to an employer's Maryland tax
return. It is separate from the Federal HIRE tax incentive program and other state tax credit programs.
There are no specific provisions in this tax credit law that would preclude you from applying for other
similar state or federal tax credits, including the Federal HIRE credit. Employers should check with their
tax advisors regarding specific rules for other tax credit programs.
Q. Is there a salary cap or minimum associated with the tax credit?
No. The law does not impose any specific maximum or minimum salary. The position must be full-time, so in
terms of minimum salary, the employer would need to comply with other applicable wage laws.
Q. Does this credit apply to a graduating student on a H1b visa?
The law defines a "qualified employee" as one who is a resident of the state and is receiving unemployment
insurance benefits or has exhausted benefits within the past 12 months. It is unlikely that a student on
an H1b visa would satisfy these requirements.
Our company is adding new positions due to growth. We have similar positions that are already
filled, but need additional employees. Would those additional positions qualify?
Yes.
Q. I have a tax question. Our company is an S Corp. Does the credit flow through to the
shareholder's tax returns?
All tax return questions should be directed to the
Maryland Comptroller's Office.
Q. If my corporate office is in another state, but we have operations here in Maryland, can we
qualify?
Yes. As long as an employer conducts business in Maryland and files Maryland tax returns, it would meet
the definition of a qualified employer under this law.
Q. Are there any specific provisions of this law for government contracted companies?
No.
Q: What is meant by "full time immediately preceding the date of hire"?
This means the employee was working full time (35 or more hours per week) for another employer before
being hired by you. This previous employment will be considered "immediately preceding the date of hire"
if less than a week had passed since the individual left the full time work of the other employer in
order to work for you.
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