Instructions For Form 500cr - Business Income Tax Credits

2013

BUSINESS INCOME TAX

MARYLAND

FORM

CREDITS INSTRUCTIONS

500CR

Spent at least one-half of their working hours in the

On line 6, Part A-II, enter the number of first-year qualified

enterprise zone on activities of the business resulting

employees who are not located in a focus area who were not

directly from its location in the enterprise zone;

claimed in Part A-I.

Earn 150% or more of the federal minimum wage; and

On line 7, Part A-II, enter the amount of wages for these employees

up to a maximum of $1,000 per employee.

Were hired by the business after the later of the date on

which the enterprise zone was designated or the date on

Part A-III - Credit for economically disadvantaged

which the business entity located in the enterprise zone.

employees located in a focus area. A credit is allowed for each

new economically disadvantaged employee for a three-year period

In addition, an employee may not have been hired to replace an

beginning with the first year the employee was qualified.

individual employed by the business in that or the three previous

tax years except an economically disadvantaged employee hired

The credits are limited to the following amounts of wages paid

to replace a previously qualified economically disadvantaged

to the same economically disadvantaged employee: $4,500 in

employee, for whom the business received the corresponding

the first year, $3,000 in the second year and $1,500 in the third

first- or second-year credit in the immediately preceding tax year.

year. If the employee replaced a previously qualified economically

disadvantaged employee, the credit for the new employee will be

For information on the location of enterprise zones and focus areas

the same as would have been allowed for the replaced employee.

and the standards which businesses must meet to qualify, contact:

On line 8, Part A-III, enter the number of economically

Maryland Department of Business and Economic Development

disadvantaged qualified employees located in a focus area in their

Office of Finance Programs, Tax Incentives Group

first year of employment in the “First Year” box. Also, enter the

401 E. Pratt St.

number of these qualified employees in their respective second

Baltimore, MD 21202

and third year boxes.

410-767-6438 or 410-767-4041

On line 9, Part A-III, enter the credit equal to the wages paid to

each first year employee up to a maximum of $4,500 per employee.

Economically disadvantaged employees are those who are certified

as such by:

On line 10, Part A-III, enter the credit equal to the wages paid

to each second year employee up to a maximum of $3,000 per

Maryland Department of Labor, Licensing and Regulation

employee.

Division of Workforce Development and Adult Learning

1100 N. Eutaw Street

On line 11, Part A-III, enter the credit equal to the wages paid

Baltimore, MD 21201

to each third year employee up to a maximum of $1,500 per

410-767-2047

employee.

That office will provide information relating to certification

On line 12, Part A-III, enter the sum of lines 9 through 11.

requirements for such employees.

Part A-IV - Credit for other qualified employees located in

Specific Requirements

a focus area. A credit is allowed for each new qualified employee

located in a focus area not provided in Part A-III. The credit is

Complete Parts A-I and A-II if the business is located in an

limited to $1,500 of wages paid and is applicable for only the first

enterprise zone but not in a focus area.

year the employee was qualified.

Complete Parts A-III and A-IV if the business is located in a focus

On line 13, Part A-IV, enter the number of first-year qualified

area.

employees located in a focus area who were not claimed in Part

Part A-I - Credit for economically disadvantaged employees

A-III.

not located in a focus area. A credit is allowed for each new

On line 14, Part A-IV, enter the amount of wages for these

economically disadvantaged employee for a three-year period

employees up to a maximum of $1,500 per employee.

beginning with the year the employee was qualified. The credits are

limited to the following amounts of wages paid to the economically

Part A - Summary

disadvantaged employee: $3,000 in the first year, $2,000 in the

Add lines 5, 7, 12 and 14 and enter total on line 15, Part A.

second year and $1,000 in the third year. If the employee replaced

Also the amount on line 15, Part A, becomes an addition

a previously qualified economically disadvantaged employee, the

modification. Whenever an Enterprise Zone Tax Credit is claimed,

credit for the new employee will be the same as would have been

an addition modification must be made in the amount of the credit

allowed for the replaced employee.

claimed.

On line 1, Part A-I, enter the number of economically disadvantaged

This credit is not refundable and is applied only against the

qualified employees not located in a focus area in their first year

Maryland State tax. To the extent the credit is earned in any year

of employment in the “First Year” box. Also, enter the number

and it exceeds the State income tax, the business is entitled to an

of these qualified employees in their respective second and third

excess carryover of the credit until it is used, or the expiration of

year boxes.

five years, whichever comes first.

On line 2, Part A-I, enter the credit equal to the wages paid to each

Business must include certification with the return which

first year employee up to a maximum of $3,000 per employee.

shows the business is located in a Maryland enterprise

On line 3, Part A-I, enter the credit equal to the wages paid to each

zone.

second year employee up to a maximum of $2,000 per employee.

Maryland has more than 30 enterprise zones. Counties and

On line 4, Part A-I, enter the credit equal to the wages paid to each

municipalities are responsible for certifying a business as eligible

third year employee up to a maximum of $1,000 per employee.

for the tax credits. Contact the county or municipal enterprise

On line 5, Part A-I, enter the sum of lines 2 through 4.

zone administrator for more information. Department of Business

and Economic Development (DBED) has a list of jurisdictions with

Part A-II - Credit for other qualified employees not located in

enterprise zones on its Web site. Go to

a focus area. A credit is allowed for each new qualified employee

to see the list of Maryland Enterprise Zones by Region.

not located in a focus area not provided in Part A-I. The credit is

limited to $1,000 of wages paid and is applicable for only the

first year the employee was qualified.

13-49

Instructions For Form 500cr - Business Income Tax Credits - 2013 Page 2

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