Incentives Watch: States Encourage Businesses to Hire With Job Creation Credits

Delaware has enacted legislation related to job creation credits in the state. In S.B. 271, Delaware expands eligibility for the New Economy Jobs Credit program to employers relocating at least 200 vital jobs to the state, a recent Bloomberg BNA Weekly State Tax Reportarticle reported. The credit is allowed in a certified year for qualified employers who employ no fewer than 200 vital employees in excess of the number of vital employees it had during the base year. Additionally, the qualified employer must provide at least $70,000 of compensation to such vital employees, according to the article.

In addition, Delaware recently enacted a refundable tax credit, called the veterans’ opportunity credit, of up to $1,500 for each recent combat veteran hired, according to another Bloomberg BNA Weekly State Tax Reportarticle. The credit is available to any business that hires a qualified veteran on or after Jan. 1, 2012, but prior to Jan. 1, 2016. The veteran must be a resident, or nonresident member of the Delaware National Guard, who engaged in military service and received an Afghanistan Campaign Medal, Iraq Campaign Medal, or Global War on Terrorism Expeditionary Medal.

Likewise, Illinois recently amended its credit for hiring veterans, a Bloomberg BNA Weekly State Tax Reportarticle noted. The credit enhances the hiring veterans’ tax credit by providing a credit equal to 20 percent of the gross wages paid by the taxpayer to a qualified veteran in the course of that veteran's sustained employment during a taxable year. The credit is capped at $5,000 per veteran hired. Previously, credit was limited to 10 percent of gross wages and carried an annual cap of $1,200.

Another state, Connecticut, expanded its job expansion tax credit program. The legislation amends the job expansion tax credit, allowing employers to claim the credit for employees receiving employment services from the Department of Mental Health and Addiction Services or participating in employment opportunities and day services from the Department of Developmental Services, reports a Bloomberg BNA Weekly State Tax Reportarticle.

Moreover, legislation enacted in Ohio expands its job creation tax credit by allowing employers hiring “home-based employees” to be eligible for the credit, a Bloomberg BNA Weekly State Tax Reportarticle noted. A “home-based employee” is an employee whose services are performed primarily from his or her Ohio residence exclusively for the benefit of the project and whose rate of pay is at least 131 percent of the federal minimum wage.

For more information about the various job creation credits available in Delaware, Illinois, Connecticut, and Ohio, check out the Bloomberg BNA State Tax Portfolios.

In other developments . . .

The Georgia Department of Revenue issued regulations extending the department's review period for taxpayers claiming the withholding tax benefit for the qualified research expenses credit, according to an article in the Bloomberg BNA Weekly State Tax Report.

By: Kathleen Caggiano

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