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More Jobs for Marylanders Tax Credit Benefits Manufacturers and Other Businesses

More Jobs for Marylanders Tax Credit Benefits Manufacturers and Other Businesses

Manufacturing & Distribution

Maryland manufacturers, as well as other businesses located in certain geographic areas, may be eligible for a potentially significant tax credit, but the application window closes soon.

If you anticipate hiring employees in the first half of 2022 for your business, you can take advantage of the More Jobs for Marylanders Incentive Program. However, the program will close to new applicants on June 1, 2022, so you should get your application in now.

What Is the More Jobs for Marylanders Incentive Program?

The purpose of the More Jobs for Marylanders Incentive Program is to promote the growth of manufacturing in Maryland. The program offers tax incentives for manufacturing job creation, investing in new equipment, and funding job training and apprenticeship programs.

While More Jobs for Marylanders was originally created only for manufacturing businesses, the program since expanded to offer the same benefits to non-manufacturers that are located in or expand into Maryland Opportunity Zones.

What Are the Benefits of the Tax Credit?

Depending on whether the business is a new or existing manufacturing business, qualified businesses are eligible for a refundable income tax credit of 5.75% of wages for each qualified position, a credit against the state’s portion of the property tax, a refund of sales and use tax, and a waiver of fees charged by the State Department of Assessments and Taxation (SDAT).

Enhanced incentives are available to businesses located in opportunity zones and the incentives may be claimed for up to 10 consecutive years.

According to the Maryland Department of Commerce’s website, the benefits of the tax credit vary depending on your business.

Tier 1* New Manufacturing Businesses are eligible for (a) a refundable credit against the state’s income tax of 5.75% of wages for each qualified position, (b) a credit against the state’s portion of the property tax, (c) a refund of sales and use tax and (d) a waiver of fees charged by SDAT.

Tier 1 or Tier 2** Existing Manufacturing Businesses are eligible for a refundable credit against the state’s income tax of 5.75% of wages for each qualified position.

New Non-Manufacturing Businesses in an Opportunity Zone are eligible for (a) a refundable credit against the state’s income tax of 5.75% of wages for each qualified position, (b) a credit against the state’s portion of the property tax that is the lesser of 100% of state property tax OR $250 per qualified position, (c) a refund of sales and use tax and (d) a waiver of fees charged by SDAT.

Non-Manufacturing Existing Businesses in an Opportunity Zone are eligible for a refundable credit against the state’s income tax of 5.75% of wages for each qualified position.

The total amount of income tax credits is capped for all businesses in a fiscal year. The credits are issued on a first come, first-served basis. The total amount of sales and use tax credits is capped at $1 million in a fiscal year.

Additional benefits are available to manufacturers in the form of accelerated and bonus depreciation on the investment in new equipment. Accelerated and bonus depreciation is available to any Maryland manufacturer and is not dependent on job creation or facility location.

*Tier 1 areas include Baltimore City, Allegany, Baltimore, Caroline, Cecil, Dorchester, Garrett, Kent, Prince George’s, Somerset, Washington, Wicomico and Worcester Counties. Tier 1 areas also include Opportunity Zones located in any Maryland county.

**Tier 2 areas are any areas that are not Tier 1 areas.

Eligibility Requirements for Manufacturers

While there are various eligibility requirements, businesses must be a manufacturer primarily engaged in activities that are included in Sectors 31, 32 or 33 of the North American Industrial Classification System (NAICS), except for refiners, or a non-manufacturing business located in an Opportunity Zone.

There are also other eligibility requirements. Manufacturers must:

  • Offer ongoing job training or a post-secondary education program such as tuition reimbursement
  • Provide a Notice of Intent to enroll in the program
  • Create at least five new qualified positions* if you are a new or existing manufacturer in Tier 1 areas
  • Create at least 10 new qualified positions if you are an existing manufacturer in Tier 2 areas
  • Begin hiring within 12 months of the Notice of Intent to Maryland’s Department of Commerce. Once a business begins hiring, it must add five new qualified positions (Tier 1 areas) or 10 new qualified positions (Tier 2 areas) within 12 months after the date of its first new hire.
  • Be certified by the Department of Commerce as a qualified business entity

*A qualified position is a job that is full-time, pays at least 120% of state minimum wage and is filled for 12 months before they qualify for credits.

Eligibility Requirements for Non-Manufacturers

To qualify for the More Jobs for Marylanders tax credit, non-manufacturing businesses must:

  • Be located in an Opportunity Zone
  • Provide Notice of Intent to Maryland’s Department of Commerce before hiring
  • Create at least five qualified positions**
  • Offer ongoing job training or provide a post-secondary education program
  • Begin hiring within 12 months of its Notice of Intent to the Department of Commerce. Once a business begins hiring, it must add five new qualified within 12 months after the date of its first new hire.
  • Be certified by the Department of Commerce as a qualified business entity

**A qualified position is a job that is full-time, pays at least $50,000 per year, and is filled for 12 months before they qualify for credits.

Non-manufacturing businesses do not include businesses that (i) provide adult entertainment, (ii) are primarily engaged in retail activities (except grocery stores), (iii) are primarily engaged in the sale or distribution of alcoholic beverages or (iv) are one of the following types of entities: a private or commercial golf course or country club, a tanning salon or a bail bondsman.

Application Timeline

You have until June 1, 2022 to enroll your business in the program and be certified as a qualified business entity.

Businesses that are certified to receive benefits under the More Jobs for Marylanders Incentive Program will receive the benefits for the full 10-year duration, subject to appropriation.

However, if during the 10-year benefit period the number of new qualified positions falls below the number the business received credit for in the first benefit year, all benefits will be terminated.

How to Apply for the Tax Credit

There are different applications for different types of businesses. You can access the applications and other paperwork on the Department of Commerce’s website.

Other Resources

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Need Help?

If you need help applying for the More Jobs for Marylanders tax credit, or need help determining whether your business is eligible, contact us here or call 800.899.4623.

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Published on January 25, 2022