Enterprise Zone Tax Credit (EZ)

About this page.  This page explains the Enterprise Zone Tax Credit in plain language. The full legal requirements are set by Maryland Tax-General Article §10-702 (income tax), Maryland Tax-Property Article §9-103 (property tax), and the program regulations - PDF. If anything on this page conflicts with the statute or regulations, the statute and regulations control.

Program Status

The program is currently active.

There are 31 Enterprise Zones in 19 Maryland jurisdictions and 6 Focus Areas in Baltimore City. Local Enterprise Zone administrators accept applications on a rolling basis. There is no statewide application deadline.

Zones are designated and redesignated by the Secretary of Commerce. The most recent redesignation took effect June 15, 2026. See Governor Moore Announces Expanded, Redesignated Enterprise Zones in Maryland.

Zones expiring December 14, 2026

Three Enterprise Zones are scheduled to expire on December 14, 2026:

• Queen Anne’s County

• Crisfield-Somerset County

• Berlin-Worcester County

Commerce notifies the local Enterprise Zone administrator when a zone is approaching expiration. Businesses in these zones should confirm current status with their local Enterprise Zone administrator - PDF - 89.23 KB before relying on the credit.

What This Program Does

The Enterprise Zone (EZ) Tax Credit gives Maryland businesses tax credits in return for creating jobs and making investments in designated areas of the state.

Businesses located in an Enterprise Zone may receive:

• State income tax credits for hiring qualified new employees
• Local real property tax credits for expansion, renovation, or capital improvements to real property

Businesses located in an Enterprise Zone Focus Area may receive enhanced versions of these credits, plus an additional local personal property tax credit on new investment in business equipment.

Who This Is For

This program is for Maryland businesses that:

• are located within a designated Enterprise Zone or Focus Area
• hire new full-time employees, or
• make investments in real property (or personal property in a Focus Area)

Both the income tax credit and the property tax credits are certified through the local Enterprise Zone administrator for your zone, not through the Maryland Department of Commerce.

Definitions

Enterprise Zone (EZ).  A geographic area designated by the Secretary of Commerce to encourage business investment and job creation. Maryland has 31 Enterprise Zones in 19 jurisdictions.

Focus Area.  A subset of an Enterprise Zone with greater economic distress. Focus Areas qualify for enhanced credits. Maryland’s six Focus Areas are all in Baltimore City.

Qualified new employee.  A full-time employee (35+ hours per week) hired to fill a newly created position, who works at least 50% of the time in the Enterprise Zone or on Zone-related activities, and who earns at least 150% of the federal minimum wage.

Economically disadvantaged employee.  A qualified new employee certified as economically disadvantaged by the Maryland Department of Labor. Hiring this type of employee qualifies for a larger, three-year credit.

Program Duration and Limits

Income tax credit

• General credit: one-time payment per qualified new employee
• Economically disadvantaged credit: paid over three years per qualified employee, as long as the employee remains in the position
• Carryforward: unused credits may be carried forward for up to five tax years

Property tax credit

• Enterprise Zone real property credit: 10 years (declining percentage after year 5)
• Focus Area real property credit: 10 years at flat 80%
• Focus Area personal property credit: 10 years at flat 80%

A special 13-year real property credit was available for newly constructed property providing both office and retail space that became eligible between January 1, 2019 and January 1, 2022. In an Enterprise Zone, the credit is 80% of the eligible assessment for the first 8 taxable years, decreasing 10% annually for the following 5 years. In a Focus Area, it is 80% for all 13 taxable years. New buildings cannot qualify for the 13-year version, but buildings already in that benefit period continue under those terms.

How the Program Works

There are four distinct credits under the Enterprise Zone program. Eligible businesses may use any that apply.

1. General Income Tax Credit

A one-time tax credit for hiring a qualified new employee:

• $1,000 per qualified new employee in an Enterprise Zone
• $1,500 per qualified new employee in an Enterprise Zone Focus Area

2. Income Tax Credit for Economically Disadvantaged Employees

A three-year tax credit for hiring a qualified new employee who is also certified as economically disadvantaged, paid in declining amounts:

To receive the full credit, the employee must remain in the position for all three years.

If the employee leaves and is replaced by another certified economically disadvantaged employee, the business may continue claiming the remaining credit as if the original employee had stayed.

Note.  A business cannot receive both the General Income Tax Credit and the Economically Disadvantaged Income Tax Credit for the same employee.

3. Real Property Tax Credit (Enterprise Zone)

A 10-year credit against local real property taxes for the increase in assessed value from a real property expansion, renovation, or capital improvement.

The credit applies to the “eligible assessment” (the increase in assessed value from the improvement):

• Years 1–5: 80% of the eligible assessment
• Year 6: 70%
• Year 7: 60%
• Year 8: 50%
• Year 9: 40%
• Year 10: 30%

4. Real and Personal Property Tax Credits (Focus Area)

Businesses in a Focus Area receive enhanced property tax credits.

Real Property Tax Credit — Focus Area:

• 80% of the eligible assessment for each of 10 years (no decline)

Personal Property Tax Credit — Focus Area only:

• 80% of the eligible assessment for each of 10 years on new investment in personal property, such as business equipment

Key Eligibility Requirements

To qualify for any of the Enterprise Zone credits, a business must be certified by the local Enterprise Zone administrator for the zone where the business is located. A locality may establish additional certification requirements.

Income tax credit requirements

Each new employee being claimed for the credit must meet all of these conditions:

• Hired after the business was located in the Enterprise Zone or after the Enterprise Zone or Focus Area was designated
• Employed for at least 35 hours per week for six months (Enterprise Zone) or 12 months (Focus Area), before or during the taxable year the credit is claimed
• Spends at least 50% of all work time in the Enterprise Zone or on Zone-related business activities
• Hired to fill a newly created position — the business’s total full-time positions must increase by the number of credits claimed
• Earns at least 150% of the federal minimum wage

Note on the wage requirement.  The Enterprise Zone wage test is based on the FEDERAL minimum wage, not the Maryland state minimum wage. Confirm the current federal rate before applying. Maryland and county minimum wage laws apply separately as a matter of employment law.

To claim the credit for economically disadvantaged employees, the business must also:

• Obtain a certification from the Maryland Department of Labor for each employee
• Keep the employee in the position for three years to receive the full credit

Property tax credit requirements

To qualify for the property tax credit, a business must meet all state and local eligibility requirements. The business must either:

• make an investment in capital improvements, or
• hire new employees

Local eligibility requirements vary by Enterprise Zone. Contact your local Enterprise Zone administrator - PDF - 89.23 KB before applying.

Maryland Enterprise Zones

Use the Maryland Enterprise Zone interactive map to enter an address and check whether a property is in an Enterprise Zone.

Enterprise Zones (31 zones in 19 jurisdictions)

Zone designations and expiration dates are set by the Secretary of Commerce and change over time. This list reflects the redesignation effective June 15, 2026. Confirm current status with your local Enterprise Zone administrator.

Focus Areas (Baltimore City)

All six Focus Areas are located in Baltimore City and are each part of the larger Baltimore City Enterprise Zone.

Documents You Will Need to Apply

Required documents are determined by the local Enterprise Zone administrator and may vary by jurisdiction. Applicants should be prepared to provide:

Business documentation

• Business legal name, structure, and address showing location within the Enterprise Zone or Focus Area
• Business registration records
• Description of business activities

For income tax credit applications

• Payroll records showing hours, wages, and start dates for each new employee
• Documentation that each new employee meets the qualified new employee requirements
• Documentation that the position is newly created (not a replacement or transfer)
• For economically disadvantaged employees: certification from the Maryland Department of Labor

For property tax credit applications

• Documentation of capital improvements, expansion, or renovation (contracts, invoices, building permits)
• Property assessment records showing the change in value
• Any additional documentation required by the local Enterprise Zone administrator

Local administrators may request additional documentation to verify eligibility.

How to Apply

All Enterprise Zone certifications are issued at the local level.

1. Identify your local Enterprise Zone administrator using the Local Enterprise Zone Administrators list - PDF - 89.23 KB.
2. Contact the administrator to confirm local eligibility requirements and application materials.
3. Submit the local certification application along with required documentation.
4. Once certified, claim the income tax credit on your Maryland tax return (see “How You Claim the Credit” below).
5. For property tax credits, the local jurisdiction applies the credit to the property tax bill after certification.

Application Review Timeline

Review timelines are set by each local Enterprise Zone administrator and vary by jurisdiction. Contact your local administrator for an estimated timeline.

How You Claim the Credit

Income tax credit

After the local administrator certifies the business and qualified employees:

1. Use Maryland Tax Form 500CR to claim the credit.
2. Include Form 500CR with the Maryland income tax return for the year the credit is being claimed.

Note.  The credit applies only to Maryland state income tax. It does not reduce the county income tax add-on.

If the credit exceeds the state income tax owed for the year, the unused portion may be carried forward for up to five tax years.

Property tax credit

The local jurisdiction applies the property tax credit directly to the business’s property tax bill. The business does not file a separate claim form.

Contact your local Enterprise Zone administrator if your tax bill does not reflect the credit you were certified for.

Frequently Asked Questions

Legal Notices and Required Language

These credits are authorized under:

• Maryland Tax-General Article §10-702 (Income Tax Credit)
• Maryland Tax-Property Article §9-103 (Property Tax Credit)

Program regulations and resources:

• Maryland Enterprise Zones Regulations (PDF) - PDF
• Enterprise Zone Jurisdiction Manual (PDF) - PDF
• Local Enterprise Zone Administrators (PDF) - PDF
• Enterprise Zone Annual Report 2025 (PDF) - PDF
• Governor Moore Announces Expanded, Redesignated Enterprise Zones (June 2026)

Applicants should consult the statute and applicable regulations for the complete legal requirements governing this tax credit.

Contact

For state-level questions about the Enterprise Zone Tax Credit:

Caroline Kimani
Tax Specialist
Maryland Department of Commerce
Office of Finance Programs
Email: [email protected] - PDF - 89.23 KB
Phone: 410-767-0939

For local certification questions, contact your local Enterprise Zone administrator - PDF - 89.23 KB.