State agencies use tax credits for economic development. Whereas some states provide fewer but more targeted programs, others offer greater diversity in industry investments.
Many state tax credit programs are tied to business investment and job creation. The programs are designed to attract, retain, or expand local economic development.
State tax credit programs typically are tied to economic development strategies and tailored to meet specific industry needs, targeted populations, or geographic areas. The programs often are designed with a direct end user in mind to give states a competitive advantage.
Understanding the best state tax credit programs helps companies increase savings and strengthen the bottom line. The following are unique tax credit programs in select states.
Arizona’s Quality Jobs Tax Credit
The Quality Jobs Tax Credit rewards Arizona employers for creating jobs and investing in the state’s economy. The credit offers companies up to $9,000 of Arizona income or premium tax credits over 3 years for each net new qualifying job ($3,000 per year.)
The company qualifications include:
- Investing at least $100,000 if located in a rural area or at least $500,000 if located in an urban area.
- Adding at least five net new jobs if located in a rural area or at least 25 net new jobs if located in an urban area.
- Paying between 150% and 200% of the county median wage in the company’s location.
Maryland’s One Maryland Tax Credit
The One Maryland Tax Credit program incentivizes companies to invest in economic development projects in a qualified distressed county. Companies can qualify for project tax credits of up to $5 million and startup tax credits of up to $500,000.
Missouri’s Rebuilding Communities Tax Credit Program
The Rebuilding Communities Tax Credit Program benefits eligible companies that exist, relocate, or expand within a distressed Missouri community. The benefits include a 40% income tax credit, 40% equipment tax credit, 1.5% employee tax credit, and 25% equipment tax credit for diverse degrees of investment and job creation.
New York’s Workers with Disabilities Employment Tax Credit
The Workers with Disabilities Employment Tax Credit program provides tax incentives for New York companies employing people with disabilities who receive vocational rehabilitation services or received them up to 2 years before being hired. Companies can earn $2,100 in state tax credits during the second year of employment. These credits can be combined with the federal Work Opportunity Tax Credit (WOTC) for additional savings.
Get Help Navigating State Tax Credit Programs
Navigating state tax credit programs can be complex. MJA & Associates ensures you uncover and claim the credits your business qualifies for. Let us handle the details while you focus on growing your business.
