SAMANTHA DEREMIGISNOVEMBER 27 , 2012

MD Business Tax Credits

Purpose of Review

Many credits available to offset Maryland taxPurpose is to make you aware

Quick References

Instructions to Form 500 CRMaryland Administrative Releases:

Administrative Release 33 – Tax Credits for Hiring Individuals with Disabilities

Administrative Release 36 – Tax Credit for Cost of Providing Commuter Benefits to Employees

Administrative Release 39 – Long Term Employment of Qualified Ex-Felons Tax Credit

http://www.marylandtaxes.com/publications/bulletins/it/default.aspA Guide to Business Tax Credits:

Issued by the Comptroller – PDF guide that contains basic information about each available credit

http://business.marylandtaxes.com/taxinfo/taxcredit/2012_tax_credit_guide.pdf

Available Credits for Tax Years Beginning in 2012

Bio-Heating Oil Tax Credit Biotechnology Investment Incentive

Tax Credit Businesses that Create New Jobs

Tax Credit Cellulosic Ethanol Technology

Research and Development Tax Credit

Clean Energy Incentive Tax Credit Community Investment Tax

Credit Commuter Tax Credit Electric Vehicle Supply Equipment

Tax Credit Employer-Provided Long-Term

Care Insurance Tax Credit Enterprise Zone Tax Credit Film Production Tax Credit

Job Creation Tax Credit Job Creation and Recovery Tax

Credit Maryland Disability Employment

Tax Credit Maryland-Mined Coal Tax Credit One Maryland Economic

Development Tax Credit Research and Development Tax

Credit Security Clearances – Employers

Cost Sustainable Communities Tax Credit Telecommunications Property Tax

Credit Work-Based Learning Program

Tax Credit

New Credits for 2012

MD Tax legislation that was passed during the 2012 session of the General Assembly & signed into law created the following new business tax credits: Job Creation and Recovery Credit Security Clearances – Employer Costs Telecommunications Property Tax Credit - repealed

Other Credits

Bio-Heating Oil Tax CreditBiotechnology Investment Incentive Tax Credit

Businesses that Create New Jobs Tax Credit

May be available for businesses located in Maryland that create new positions and establish or expand business facilities in the state

To be eligible for the tax credit, businesses must first have been granted a property tax credit by a local government of Maryland for creating the new jobs

The credits are calculated as a percentage of the property tax liability on the new or expanded portion of the facility

The unused credit may be carried forward for the next five tax years

The business must create at least 25 new positions as part of the new or expanded business facility

New positions created must meet specific guidelines

Other Credits

Cellulosic Ethanol Technology Research and Development Tax Credit

Clean Energy Incentive Tax Credit

Community Investment Tax Credit

Available to businesses and individuals that contribute money, goods, or property worth $500 or more to qualified organizations approved projects

Credit allowed is 50% of the value of the approved donation up to a maximum of $250,000

A copy of the required approval from the state must be attached to Form 500CR

Commuter Tax Credit

Available to Maryland employers, including organizations exempt from taxation

Credit of 50% of the eligible costs paid by employer

Maximum of $50 per employee, per monthMust complete the Maryland Commuter

Tax Registration Form & submit to MTARegistration form must be on file before

businesses file for the creditNo carryovers to other tax years

Other Credits

Electric Vehicle Supply Equipment Tax Credit

Employer-Provided Long-Term Care Insurance Tax Credit

Available for companies that provide long-term care insurance benefits to one or more employees during the taxable year as part of an employee benefits package

The credit allowed is 5% of the costs, not to exceed lesser of $5,000 or $100 per employee

Unused credit may be carried forward for the next 5 tax years

Other Credits

Enterprise Zone Tax CreditFilm Production Tax CreditJob Creation Tax Credit Job Creation and Recovery Tax CreditLong-Term Employment of Ex-Felons Tax Credit

Maryland Disability Employment Tax Credit

Credits available to businesses that hire people with disabilities including veterans

Company needs to obtain a determination from the state that the individual is a qualified employee with a disability

The credit is allowed for the first two years of employment of the disabled individual for both the wages paid and the child care or transportation expenses paid on behalf of the employee

Credit currently available through July 1, 2013

Other Credits

Maryland-Mined Coal Tax CreditOne Maryland Economic Development Tax Credit

Research & Development Tax Credit

Available for businesses that incur qualified research and development expenses in Maryland

The total credits for all businesses may not exceed $6 million per year

The business must submit an application for the credit to the state by September 15 of the year following the tax year in which the expenses were incurred

The state will certify the amount of credit available to the business by December 15

Security Clearances – Employer Costs

Can claim a credit for a portion of the costs incurred to obtain federal security clearances and to construct or renovate certain sensitive compartmented information facilities

The credit can be taken for tax years beginning after December 31, 2012 through January 1, 2017

Must submit an application to the Dept. of Bus. and Econ. Development by September 15th of the calendar year following the end of the tax year

Approval by December 15th Credit cannot exceed $100,000

Other Credits

Sustainable Communities Tax CreditTelecommunications Property Tax Credit

Repealed during 2012 special session beginning in tax year 2012

Work Based Learning Program Tax Credit

Available for businesses that hire students as part of an approved work-based learning program in MD

The businesses must establish a work-based learning program and have the program approved by the state

Students must be employed for at least 200 hours

The credit is 15 percent of the wages paid to each student during the taxable year.

Cumulative credits for all years cannot exceed $1,500 per student