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Employment Opportunity Tax Credit

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 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).

Links for Business Tax Credits
General Information
Business Tax Credits
  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
  Cybersecurity Investment Incentive Tax Credit
  Electric Vehicle Recharging Equipment Tax Credit
  Employer-Provided Long-Term Care Insurance Tax Credit
  Employer Security Clearance Costs Tax Credits
  Employment Opportunity Tax Credit
  Enterprise Zone Tax Credit
  Film Production Activity Tax Credit
  Green Building Tax Credit
  Health Enterprise Zone Hiring Tax Credit
  Job Creation Tax Credit
  Long-Term Employment of Ex-Felons Tax Credit
  Maryland Disability Employment Tax Credit
  Maryland-Mined Coal Tax Credit
  One Maryland Economic Development Tax Credit
  Oyster Shell Recycling Tax Credit
  Qualified Vehicle Tax Credit
  Research and Development Tax Credits
  Heritage Structure Rehabilitation Tax Credit
  Work-Based Learning Program Tax Credit
  Wineries and Vineyards Tax Credit
  Endow Maryland Tax Credit
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