This credit expired December 31, 2011, and no new applications are being accepted.
Businesses located in Maryland that hired, before July 1, 2009, an individual who was receiving Aid to Families with Dependent Children (AFDC) or payments under the Family Investment Program (FIP) may have been entitled to a tax credit for a portion of wages paid to qualified employees and/or for childcare and transportation expenses paid on behalf of qualified employees.
The employees were required to be certified by the Maryland Department of Labor, Licensing and Regulation, Division of Employment and Training.
The credit is only applicable to tax years beginning before January 1, 2012, provided, however, credits shall be allowed only for expenses incurred during the last applicable tax year, 2011, for employees hired before July 1, 2009. The income tax credit is limited to the State portion of the income tax. Excess credits can be carried over for up to 5 years beginning with the tax year in which the credit was earned.
This credit has an add back provision to claim the credit. Taxpayers who are claiming the carryover of an excess Employment Opportunity Tax Credit, must add back the portion of the credit being claimed as an addition modification.
The credit may be taken against the corporate income tax, personal income tax, insurance premium tax or public service company franchise tax. The same credit may not, however, be applied to more than one tax type.
Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and which were operating in Maryland were eligible to claim the tax credit.
Electronic Filing Required:
The carryover of the excess Employment Opportunity income tax credit must be requested on an electronic return.
Insurance premiums tax:
Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.
Public service company franchise tax:
Form AT3-74 must be submitted with the franchise tax return (SDAT forms 11 or 11T).