TCI Tax Intelligence: State Job Tax Credits – Precertification Requirement
The majority of U.S. states offer some type of state job tax credits. These credits are very lucrative and serve as an incentive for companies to hire new full-time employees. However, these credits are not automatic. Currently, most state job creation incentives require a preapplication, preapproval or certification prior to the project start date.
To qualify for state job creation tax incentives, businesses must take action and complete precertification requirements before the project begins and hiring starts. Job creation incentives vary from state to state. Types of job creation incentives include:
- Refundable and nonrefundable income tax credits, or
- Grants and rebates
Some of the more popular state job creation programs are:
The Ohio Job Creation Tax Credit is a refundable tax credit for companies creating at least 10 new jobs (within three years). The minimum annual payroll of the new jobs is required to be at least $660,000 and pay at least 150 percent of the federal minimum wage. The tax credit is measured as a percentage of the state income tax withholdings for all new employees hired under the program, and is applied toward the company’s commercial activity tax liability.
Advantage Arkansas is an income tax credit based on a percentage of the annual payroll of the new full-time permanent employees and is earned each tax year for a period of five (5) years.
Arizona Quality Jobs tax credit offers up to $9,000 of Arizona income or premium tax credits spread over a three-year period ($3,000 per year) for each new employee whose job meets the state’s definition of a “net new quality job”.
Application requirements for job creation incentives vary from state to state. Equifax Workforce Solutions has a dedicated team of Economic Development Incentives Services (EDIS) professionals who secure state job creation incentives. If your company is interested in receiving more information on these credits or any other credits, please contact your Account Manager (AM) or Pete Krieshok of Equifax Workforce Solutions at 314-214-7325 or by email at firstname.lastname@example.org.
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