Form 500cr - Maryland Business Income Tax Credits - 2012 Page 10
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172012
FORM
MARYLAND BUSINESS INCOME
500CR
TAX CREDITS INSTRUCTIONS
No credits may be earned for any tax year beginning on or
(including real property) not to exceed $250,000.
after January 1, 2016.
For further information contact:
PART D - JOB CREATION TAX CREDIT
Department of Housing and Community Development
General Requirements Certain businesses that create new
100 Community Place
qualified positions in Maryland may be eligible for tax credits
Crownsville, MD 21032-2023
based on the number of qualified positions created or wages paid
410-514-7241
for these positions.
Note: A copy of the required approval from the Department of
The business facility must be certified as having created at least
Housing and Community Development must be included with
60 qualified positions, 30 high-paying qualified positions, or 25
Form 500CR.
qualified positions if the business facility established or expanded
PART F - BUSINESSES THAT CREATE NEW JOBS TAX
is in a State Priority Funding Area.
CREDIT
A qualified position is a full-time position which pays at least
To qualify, businesses must be located in Maryland and create new
150% of the federal minimum wage, is located in Maryland, is
positions or establish or expand business facilities in the state.
newly created as a result of the establishment or expansion of
If a property tax credit (or an enhanced property tax credit) as
a business facility in a single location in the state and is filled.
defined in Section 9-230 of the Tax-Property Article is granted
Qualified business entities are those that are certified as such by
by the Mayor and City Council of Baltimore City or the governing
the Maryland Department of Business and Economic De velopment.
body of a county or municipal corporation, certain businesses may
A qualified employee is an employee filling a qualified position.
be entitled to an income tax credit.
Recapture Provision If, at any time during the three tax years
These credits are based on percentages of the property tax liability
after the year the credit was earned, the average number of
as certified by the State Department of Assessments and Taxation.
qualified positions falls more than 5% below the average number
Enter the certified amount on lines 1 or 2 as applicable.
of qualified positions during the year in which the credit was
earned, a portion of the credit will be recaptured for the tax year
Recapture Provision If, at any time during the three tax
in which this occurs. The amount to be recaptured is the amount
years after the year the credit was earned, the business fails to
originally claimed multiplied by the percentage reduction in the
satisfy the thresholds to qualify for the credit, the credit must be
number of qualified employees. The credit to be recaptured is
recaptured. The income tax credit to be recaptured is reported
reported on line 26, Part W of Form 500CR.
on line 26, Part W of Form 500CR and filed with the tax return for
the tax year in which the business failed to satisfy the applicable
For certification or for information on the standards that businesses
thresholds.
must meet to qualify, contact:
For further information contact:
Maryland Department of Business and Economic Development
Division of Business Development, Tax Incentive Group
State Department of Assessments and Taxation
401 E. Pratt St.
301 W. Preston Street
Baltimore, MD 21202
Baltimore, MD 21201-2395
410-767-6438 or 410-767-4980
410-767-1191
taxcredits@dat.state.md.us
Specific Requirements
PART G - LONG-TERM EMPLOYMENT OF QUALIFIED EX-
Part D-I Credit for employees of a qualified business A credit
FELONS TAX CREDIT (for employees hired from 1/1/07
is allowed for each newly created qualified filled position. The
through 12/31/2011)
credit is the lesser of $1,000 multiplied by the number of filled
A credit is allowed to businesses that hire qualified ex-felons under
qualified positions during the credit year or 2.5% of the wages
a program approved by Maryland Department of Labor, Licensing
paid for these positions for the credit year.
and Regulation. This credit may not be claimed if the Employment
Part D-II Credit for employees working in a facility located
Opportunity Tax Credit or Maryland Disability Employment Tax
in a revitalization area A credit is allowed for each newly-created
Credit has been claimed for that employee.
qualified filled position located in a revitalization area. The credit
A qualified employee is a “qualified ex-felon” in accordance with
is the lesser of $1,500 multiplied by the number of filled qualified
Section 51(d)(4) of the Internal Revenue Code. A business may
positions or 5% of the wages paid for these positions.
not claim a credit for an employee who is hired to replace a laid-
Part D - Summary Add lines 4 and 8 and enter total on line 9.
off employee or an employee who is on strike, or for which the
The total credit will be taken over a two-year period. One-half of
business simultaneously receives federal or state employment
the credit will be allowed each year. The amount allowed for any
training benefits.
credit year cannot exceed $1,000,000.
A credit is allowed for each qualified ex-felon for a two-year
No credits may be earned for any tax year beginning on or
period beginning with the first year the employee was qualified.
after January 1, 2020.
The credit for each qualified employee hired is equal to 30% of
the first $6,000 of qualified first year wages and 20% of the first
NOTE: A copy of the certification from the Department of Business
$6,000 of qualified second year wages.
and Economic Development must be included with Form 500CR.
The employer can not claim the credit until employment has
PART E - COMMUNITY INVESTMENT TAX CREDIT
continued for at least one full year unless the employee: (a)
Businesses or individuals who contribute to approved Community
voluntarily leaves the employer; (b) becomes disabled or death
Investment Programs may be eligible for a credit against the
occurs or; (c) is terminated for cause. The credit must be prorated
state income tax. Contributions must be made to a nonprofit
for the portion of the year the employee worked unless the
organization approved by the Department of Housing and
employee voluntarily left to take another job.
Community Development. The taxpayer must apply to and
Whenever a Long-term Employment of Qualified Ex-Felons Tax
receive approval by the Department of Housing and Community
Credit is claimed against the income tax, an addition modification
Development for each contribution for which a credit is claimed.
must be made in the amount of the credit claimed.
The credit is limited to 50% of the approved contributions
12-49
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