BizLaw 101 Blog

Your Business Might Be Eligible For Tax Credits When Hiring Employees

Posted April 22, 2015 by Jamie Kent Hamelburg in BizLaw 101 Blog

If you hire an employee in 2015, you might be eligible for certain Maryland tax credits depending on where your business is located and the type of employee you hire.

Location, Location, Location…

In an effort to create new jobs and redevelop economically struggling communities within the State, Maryland gives a tax credit to businesses hiring new employees when the businesses are located in disadvantaged areas called Enterprise Zones.

The one-time credit is $1,000 per worker, which increases to $1,500 for new hires in Prince George’s County and Baltimore City.

Hiring Disadvantaged Workers Is Good For The Bottom Line

Maryland also gives a larger tax credit to businesses located in the Enterprise Zones when the new jobs are given to economically disadvantaged individuals.

That credit is $6,000 over a three-year time period, which increases to $9,000 for new hires in Prince George’s County and Baltimore City. 

Is Your Business In An Enterprise Zone?

The accompanying table identifies the current Enterprise Zones in Maryland. Note that the tax credits expire over time as the locations become more developed. One notable example of this is the downtown Silver Spring area; its bustling restaurants and shops were spurred by that area’s former designation as an Enterprise Zone.

Maryland Enterprise Zones

(by County)

Allegany (Rt. 220 South, Cumberland)

Baltimore City

Baltimore (North Point, ​Southwest, Woodlawn)

Cecil

Dorchester (Cambridge, ​Hurlock Enterprise Zone)

Garrett (Southern Garrett Industrial Park, ​Northern Garrett Industrial Park)

Harford (Aberdeen/Havre de Grace)

Montgomery (Olde Towne-Gaithersburg, ​Glenmont, ​Long Branch –Takoma Park, ​Wheaton)

​Prince George's

Somerset

Washington (Town of Hancock, ​Hagerstown)

Wicomico (Salisbury, Fruitland)

Worcester (Berlin, ​Pocomoke City, Snow Hill)

Maryland’s Department of Economic Development recently issued a report detailing the use and effectiveness of its Enterprise Zone Tax Credit program. A link to the report is here. 

Do Your Paperwork

In order to use a tax credit, you must become certified before hiring your employee. Contact information for individuals who can assist with the certification process can be found here. And, while “nothing is certain except death and taxes,” a good CPA can advise you on whether your business qualifies for the Maryland Enterprise Zone tax credit in addition to other county, state and federal tax credits.