JOB CREATION TAX CREDITS FOR YOUR BUSINESS – ACROSS THE UNITED STATES
Operating a business is no small task, and we know how high the costs can get to keep everything running. Waltz, Palmer & Dawson, LLC encourages you to consult with an experienced business attorney about tax credits that may be applicable to your business. Most states across the U.S. provide tax credit incentives to companies that create jobs or invest in certain industries or communities. We have compiled a list of job creation tax incentives across the states, but it is by no means exhaustive. If you think any of these might apply to your business, feel free to book a no-charge, initial consultation with us so we can discuss further and help you and your business save money and run more efficiently.
JOB CREATION TAX CREDITS PER STATE
Full Employment Act of 2011 Credit
“Small businesses which employ 50 or fewer employees and create new jobs paying more than ten dollars ($10) per hour can qualify for an income tax credit.” Sections 40-18-290 through 40-18-293, Code of Alabama 1975.
Credit for Employment of TANF Recipients
“A nonrefundable individual and corporate tax credit for net increases in qualified employment of recipients of temporary assistance for needy families [TANF] who are Arizona residents.”
ArkPlus Income Tax Credit
Similar to the Illinois EDGE credit, the ArkPlus Program provides a 10% income tax credit to eligible businesses on the basis of total investment in a new location or expansion project. It requires a minimum investment and payroll amount for newly hired full-time employees. ACA §15-4-2706(b).
New Employment Credit (NEC)
California’s job tax credit is for businesses who hire qualified employees and pay qualified wages in a Designated Geographic Area (DGA).
Job Growth Incentive Tax Credit
Colorado’s job creation program “provides a state income tax credit to businesses undertaking job creation projects that would not occur in Colorado without this program.” Businesses must create a minimum of 20 new jobs in Colorado with a certain average yearly wage.
New Economy Jobs Tax Credit
“The purpose of this subchapter shall be to create incentives to attract and retain Delaware employers which employ the most qualified individuals working in the forefront of traditional and emerging business competition.”
Blue Collar Job Act
“Generally, business taxpayers that: (1) are engaged in a qualified activity; (2) hire five or more qualified employees; and, (3) make an investment of at least $200,000 ($40,000 per qualified employee) in a qualified facility are entitled to tax credits against the corporation or personal income taxes, gross receipts tax, and public utility tax.” Title 30, Delaware Code, Chapter 20, Subchapters II-III, V.
Rural Job Tax Credit Program
This tax program is specifically for businesses that are located in one of Florida’s 36 designated Qualified Rural Areas. The tax credit is awarded in amounts between $1,000 -$5,000 per qualified employee.
Urban Job Tax Credit Program
This is a tax credit program for businesses located in one of Florida’s 14 designated urban areas. It is paid in amounts between $500-$2,000 per qualified job.
Job Tax Credits
Georgia offers a statewide tax credit for businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism or research and development industries. The tax credit does not apply to retail businesses. However, meeting certain other requirements can make businesses of any nature, including retail, eligible for a tax credit if they are based in the 40 least developed counties of the state.
Tax Reimbursement Incentive Program
Idaho’s tax incentive is available for a wide range of business industries and both businesses that are new to Idaho and those that are just expanding within the state are eligible. Businesses in rural areas must create 20 jobs and those in urban areas must create 50, all of which must be full-time and pay equal to or higher than the local county wage.
This Illinois tax credit is meant to attract new businesses and keep current employers in the state. It is designed to incentivize businesses to conduct their development projects in Illinois, rather than in other states. The credit is available to businesses for up to a total of 10 years. For more in-depth information on Illinois’ EDGE credit, please read our other WPD blog posts.
Economic Development for a Growing Economy (EDGE)
Just like Illinois, Indiana has its own EDGE tax credit.
Income Tax Benefit for Iowa Employers Who Hire Ex-Offenders
Businesses in Iowa that meet certain criteria are eligible to take an additional tax credit for hiring ex-offenders. Department Rules and Regulations 40.21.
Kansas Industrial Training (KIT)
The KIT program allows businesses to be reimbursed for training expenses that stem from new employees. Eligible expenses include instructor fees, supplies, and manuals.
Kentucky Unemployment Tax Credit
“The KUTC program provides employers a credit of $100 per eligible hire against Kentucky income taxes owed when they hire residents who have been unemployed for 60 days and remain on the payroll for at least 180 days.”
Enterprise Zone Tax Credit
“The Enterprise Zone, or EZ program is a jobs incentive program that provides Louisiana income and franchise tax credits to a new or existing business located in Louisiana creating permanent net new full-time jobs, and hiring at least 50% of those net new jobs from one of four targeted groups.”
Jobs and Investment Tax Credit.
“This credit is available to employers that invest at least $5 million in certain tangible property in a single year and create at least 100 new jobs within two years.”
Job Creation Tax Credit (JCTC)
“Businesses that create a minimum number of new full-time positions may be entitled to state income tax credits of up to $3,000 per job or $5,000 per job in a ‘revitalization area.’”
The Economic Development Incentive Program (EDIP)
Businesses can claim tax credits under the EDIP depending on what type of project they undertake. Each project has its own unique guidelines and they consist of: expansion projects, enhanced expansion projects, manufacturing retention and job growth projects, job creation projects, and local incentive only projects.
Greater Minnesota Job Expansion Program
“Greater Minnesota Job Expansion Program provides sales tax exemptions of up to 12 years to eligible existing businesses located in Greater Minnesota that meet eligibility requirements including specified job creation and wage level.”
Job Tax Credit
“In Mississippi, companies receive a corporate income tax credit for creating jobs. These credits are equal to a percentage of payroll for each newly created job. Companies can either use the Jobs Tax Credit, which ranges from 2.5 percent to 10 percent of payroll for each newly created job, or they can opt to monetize that credit in the form of a Job Training Grant to directly reduce their workforce training costs.”
Missouri Works Program
Eligible for-profit and non-profit businesses can claim tax credits based on a combination of factors that include their presence in certain geographical zones, number of jobs created, capital investments, and average wages.
Nebraska Advantage Package
Nebraska has a number of different tax credits in varying amounts for businesses that are dependent upon their capital investments and number of jobs created. For larger businesses, there are incentives that require anywhere from $1 million to $35 million in investments, along with the creation of new jobs. For smaller companies, there is a tax credit that does not require any capital investment at all, only the creation of 30 new jobs.
Economic Revitalization Zone Tax Credit
“The Economic Revitalization Zone tax credit offers a short term business tax credit for projects that improve infrastructure and create jobs in designated areas of a municipality. As of December 2018, there are 211 ER zones located in 68 municipalities.”
New Jobs Investment Tax Credit
“This Corporation Business Tax Credit is available for investments made in new or expanded business facilities that creates at least 5 new jobs in New Jersey. This tax credit can also pass through to principals of Subchapter-S corporations.”
High Wage Jobs Tax Credit
Qualified employers can receive a tax credit for each new high-wage job they create. The credit is equal to 8 ½ % of the wages and benefits paid for each new high wage job created, capped at $12, 750 per job. Qualified jobs are those that pay at least $40k/year in communities with populations less than 60,000 people or those that pay at least $60k/year in communities with more than 60,000 people.
Employment Incentive Credit
Qualified employers are entitled to claim a tax credit if they have increased the average number of their employees in the state to at least 101% of their number of employees in New York state during their base year.
Workforce Recruitment Credit
Employers are allowed an income tax credit for paying their employees 125% or more of the state’s average wage and implementing certain recruitment procedures in an effort to hire people for hard-to-fill positions.
Ohio has a standard job creation tax credit program with certain requirements such as maintaining a project in Ohio for a certain period of time and filing financial documents with the state.
Small Employer Quality Jobs Program
Small businesses (500 employees or less) qualify for a tax credit if they pay their employees at least 110% of the state’s average wage.
Job Creation Tax Credits (JCTC) Program
“$1,000-per-job tax credit to approved businesses that agree to create jobs within three years. Twenty-five percent of the tax credits allocated each year must go to businesses with less than 100 employees.”
Job Tax Credits
Rhode Island has numerous job creation tax credits and incentives, including their Work Opportunity Tax Credit, the Job Growth Act, the New Employment Tax Incentive and the Qualified Jobs Incentive Tax Credit.
Job Tax Credits
Certain manufacturing and processing, warehousing and distribution, research and development, agribusiness and corporate offices are eligible to claim job tax credits if they create and maintain a certain number of jobs in a taxable year.
Job Tax Credit
“A standard job tax credit is available to taxpayers that invest in Tennessee and create jobs as a result of the investment. Taxpayers that meet the requirements of a qualified business enterprise, make the required capital investment of at least $500,000 * within three years (five years in a tier 3 or 4 enhancement county), and create a minimum number of qualified jobs from the investment may receive a job tax credit equal to $4,500 for each qualified job.”
Qualified employers who are located in specific Enterprise Zones within Utah are able to claim several tax credits, including $750 for each new full-time position filled for at least 6 months during the tax year and an additional $500 if said position pays at least 125% of the county’s average monthly wage for that specific industry.
“The VEGI program provides incentives from the State of Vermont to encourage prospective economic activity in Vermont that is beyond a business’s organic growth—growth that would not occur, would not occur in Vermont, or would occur in a significantly less desirable manner without the incentive. The economic activity can be generated by a Vermont company, a Vermont division adding new qualifying employees, a company that is considering Vermont as a new location, or a start-up business.”
Green Job Creation Tax Credit
“For taxable years beginning before January 1, 2021, the Green Job Creation Tax Credit allows a credit against the Virginia individual or corporate income tax for each new green job created within the Commonwealth by the taxpayer. The amount of the annual credit for each new green job will be $500 for each job with an annual salary of $50,000 or more.”
Economic Opportunity Tax Credit
“For qualified companies that create at least 20 new jobs within specified time limits (10 jobs in the case of qualified small businesses) as a result of their business expansion projects, the State’s Economic Opportunity Tax Credit can offset up to 80 percent of the corporate net income tax and personal income tax (on flow through income only) attributable to qualified investment.” The credit increases to offset 100% of corporate net income tax if the business pays its employees an annual median wage higher than the stage average. Additionally, the number of jobs created that is necessary to qualify for the tax credit decreases for small business, pursuant to the state’s Small Business Tax Credit.
Business Development Tax Credits
“The Business Development Tax Credit Program supports job creation, capital investment, training and Corporate Headquarters location or retention by providing businesses located in or relocating to Wisconsin with refundable tax credits that can help to reduce their Wisconsin income/franchise tax liability or provide a refund, thereby helping to enhance their cash flow to expand the project’s scope, accelerate the timing of the project or enhance payroll.”
For more information on other tax credits and incentives for businesses, see WPD blog posts.
Should you have questions regarding the federal R&D Tax Credit or other legal needs for your business or would like to schedule a no-charge initial consultation to discuss questions you have about your business, please contact Waltz, Palmer & Dawson, LLC at (847) 253-8800 or contact us online.
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