1. MD Business Tax Credits
SAMANTHA DEREMIGIS
NOVEMBER 27, 2012

2. Purpose of Review
 Many credits available to offset Maryland tax
 Purpose is to make you aware

3. Quick References
 Instructions to Form 500 CR
 Maryland 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.as
p
 A 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_cre
dit_guide.pdf

4. Available Credits for Tax Years Beginning in 2012
 Bio-Heating Oil Tax Credit  Job Creation Tax Credit
 Biotechnology Investment Incentive Tax  Job Creation and Recovery Tax Credit
Credit  Maryland Disability Employment
 Businesses that Create New Jobs Tax Credit
Tax Credit  Maryland-Mined Coal Tax Credit
 Cellulosic Ethanol Technology Research  One Maryland Economic Development
and Development Tax Credit Tax Credit
 Clean Energy Incentive Tax Credit  Research and Development Tax
 Community Investment Tax Credit Credit
 Commuter Tax Credit  Security Clearances – Employers
 Electric Vehicle Supply Equipment Tax Cost
Credit  Sustainable Communities Tax Credit
 Employer-Provided Long-Term Care  Telecommunications Property Tax Credit
Insurance Tax Credit  Work-Based Learning Program Tax
 Enterprise Zone Tax Credit Credit
 Film Production Tax Credit

5. 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 Telecommunications Property Tax Credit - repealed

6. Other Credits
 Bio-Heating Oil Tax Credit
 Biotechnology Investment Incentive Tax Credit

7. 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

8. Other Credits
 Cellulosic Ethanol Technology Research and Development
Tax Credit
 Clean Energy Incentive Tax Credit

9. 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

10. 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 month
 Must complete the Maryland Commuter Tax
Registration Form & submit to MTA
 Registration form must be on file before businesses
file for the credit
 No carryovers to other tax years

11. Other Credits
 Electric Vehicle Supply Equipment Tax Credit

12. 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

13. Other Credits
 Enterprise Zone Tax Credit
 Film Production Tax Credit
 Job Creation Tax Credit
 Job Creation and Recovery Tax Credit
 Long-Term Employment of Ex-Felons Tax Credit

14. 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

15. Other Credits
 Maryland-Mined Coal Tax Credit
 One Maryland Economic Development Tax Credit

16. 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

17. 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

18. Other Credits
 Sustainable Communities Tax Credit
 Telecommunications Property Tax Credit
 Repealed during 2012 special session beginning in tax year 2012

19. 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