Hire Our Veterans Tax Credit
About this page. This page explains the Hire Our Veterans Tax Credit in plain language. The full legal requirements are set by Chapter 180 (Senate Bill 807, 2017) - PDF. If anything on this page conflicts with the statute or regulations, the statute and regulations control.
Important — program closed to new positions
This credit applies only to a qualified veteran’s first year of employment, and that first year must fall between tax year 2017 and tax year 2020.
Positions filled in tax year 2021 or later do not qualify for this credit. Employers hiring veterans in 2021 or later should look at the Job Creation Tax Credit instead.
This page remains available for employers that have not yet applied for certification for qualifying wages paid in 2017–2020. Contact Commerce to confirm whether an application can still be accepted.
Program Status
Closed to new positions. Positions filled on or after January 1, 2021 do not qualify for this credit.
Commerce may still accept and certify applications for qualifying first-year-of-employment wages paid in tax years 2017–2020. Employers should contact Commerce before preparing an application to confirm current processing.
What This Program Does
The Hire Our Veterans Tax Credit gives a Maryland state income tax credit to small businesses that hired qualified veterans during tax years 2017 through 2020.
The credit equals 30% of the first $6,000 of wages paid to a qualified veteran during that veteran’s first year of employment — a maximum of $1,800 per veteran.
A qualified employer may claim the credit for up to five qualified veteran employees per taxable year.
Who This Is For
This credit was for Maryland small businesses that hired qualified veterans during tax years 2017 through 2020. Two parties needed to qualify: the employer and the veteran.
Qualified employer
A qualified employer is a small business operated as one of the following:
- Individual (sole proprietor)
- Partnership
- Limited partnership
- Limited liability partnership
- Limited liability company
- Corporation
The business must employ 50 or fewer full-time employees.
Qualified veteran employee
To be a qualified veteran employee, the person must meet all four of these conditions.
Hire date
- Hired on or after January 1, 2017
Military service
- Served in the active Armed Forces (Army, Navy, Marine Corps, Air Force, or Coast Guard, including related reserve components)
- Discharged or released from that service under honorable circumstances
Active duty service length
Must meet both of the following:
- Served on active duty (not including training) for more than 180 days, OR was discharged or released from active duty for a service-connected disability; AND
- Did not have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date
Federal Work Opportunity Tax Credit (WOTC) qualified veteran
Must also be a Qualified Veteran for purposes of the federal Work Opportunity Tax Credit. The veteran must be in at least one of the following categories:
- A veteran in a family that received SNAP benefits (food stamps) for at least three months during the 15-month period ending on the hiring date
- A disabled veteran entitled to compensation for a service-connected disability who was either: hired within one year after discharge or release from active duty, OR unemployed for at least six months in the year ending on the hiring date
- A veteran who was unemployed for at least four weeks in the year ending on the hiring date
For more on the federal WOTC, see IRS Form 8850 instructions and the U.S. Department of Labor WOTC page.
Definitions
Qualified employer. A Maryland small business with 50 or fewer full-time employees that hired a qualified veteran during tax years 2017–2020.
Qualified veteran employee. A veteran who meets all four of the eligibility conditions described in this section: hire date, military service, active duty service length, and federal WOTC qualification.
First year of employment. The 12-month period beginning on the qualified veteran’s hire date with the employer. The credit applies only to wages paid during this first year.
Program Duration and Limits
Credit amount and per-employer limits
- Credit rate: 30% of the first $6,000 of first-year wages
- Maximum credit per veteran: $1,800
- Maximum veterans per employer per tax year: 5
- Maximum credit per employer per tax year: $9,000 (5 veterans × $1,800)
Annual program cap
Total credits available statewide in a tax year were capped at $500,000, with certifications approved on a first-come, first-served basis.
Credit limits
- The credit applies only to wages paid in the qualified veteran’s first year of employment.
- The credit is not refundable.
- The credit cannot be carried forward or carried back to other tax years.
Sunset
This credit was authorized for first-year-of-employment wages paid in tax years 2017 through 2020. The program has not been extended for positions filled in tax year 2021 or later.
How the Program Works
The credit equals 30% of the first $6,000 of wages paid to a qualified veteran in that veteran’s first year of employment.
How the credit is calculated
- First-year wages of $6,000 or more: credit = $1,800 (the maximum)
- First-year wages between $0 and $6,000: credit = 30% of those wages
Example. An employer pays a qualified veteran $4,000 during the first year of employment. The credit is 30% × $4,000 = $1,200.
Example. An employer pays a qualified veteran $25,000 during the first year of employment. The credit is 30% × $6,000 = $1,800 (the maximum). The remaining $19,000 in wages does not generate additional credit.
Example. A small business hires three qualified veterans in 2019. Each veteran earns more than $6,000 in their first year. The employer’s total credit is 3 × $1,800 = $5,400.
Key Eligibility Requirements
To qualify for the credit, an employer must:
- Be a Maryland small business with 50 or fewer full-time employees
- Hire one or more qualified veteran employees on or after January 1, 2017
- Pay wages to the qualified veteran during the veteran’s first year of employment, with that first year falling in tax years 2017–2020
- Receive a tax credit certification from the Maryland Department of Commerce
Each qualified veteran employee must meet all of the conditions listed in “Who This Is For → Qualified veteran employee” above.
Documents You Will Need to Apply
Employers must submit the following four items to the Maryland Department of Commerce:
- Hire Our Veterans Employer Application for Certification (Forms A & B) - PDF - 379.74 KB
- Qualified Veteran Employee’s Self-Certification Form - PDF - 632.32 KB — one for each qualified veteran employee
- Copies of W-2s and/or paystubs showing first-year wages paid to each qualified veteran
- Copies of DD-214 forms (or equivalent official discharge documentation) for each qualified veteran
Commerce may request additional documentation to verify eligibility, including documentation supporting a veteran’s federal WOTC qualifying status.
How to Apply
- Complete Hire Our Veterans Employer Application Forms A and B.
- Have each qualified veteran complete a Qualified Veteran Employee’s Self-Certification Form.
- Gather copies of W-2s and/or paystubs and DD-214 or equivalent discharge forms.
- Submit the complete package to the Maryland Department of Commerce.
- Wait for the certification decision from Commerce.
Application Review Timeline
Commerce will certify or deny an application within 45 days after receiving a complete application.
Applications that are materially incomplete are not considered until all required documentation is provided.
How You Claim the Credit
The credit is claimed for the tax year in which Commerce issues the certification — not the year the wages were paid.
After Commerce issues a tax credit certification:
- File the Maryland income tax return for the taxable year in which the certification was issued.
- Complete the Form 500CR section of the return.
- Attach a copy of the certification from Commerce.
Important. Form 500CR must be filed electronically with the certification attached.
The credit applies only to Maryland state income tax. It does not reduce the county income tax add-on. The credit is not refundable and cannot be carried forward or backward.
For tax forms and filing instructions, see the Comptroller of Maryland website.
Commerce cannot provide tax advice. For tax questions beyond the scope of the certification application, contact the Comptroller of Maryland or a tax advisor.
Frequently Asked Questions
Hire Our Veterans Tax Credit FAQs
No. The credit applies only to a qualified veteran’s first year of employment, and that first year must fall in tax years 2017–2020. Positions filled in 2021 or later do not qualify. For new veteran hires, see the Job Creation Tax Credit.
Contact Commerce to confirm whether an application can still be accepted. If Commerce certifies the credit, it is claimed on the return for the tax year in which the certification is issued — not the year the wages were paid.
The tax year in which Commerce issues the certification. If the return for that year has already been filed, an amended return would be required.
No. If the credit is larger than the employer’s Maryland state income tax for the year, the unused portion is lost. The credit cannot be carried forward or backward to other tax years.
No. The credit applies only to state income tax. It does not reduce the county income tax add-on.
The first year of employment is the 12-month period beginning on the qualified veteran’s hire date. Only wages paid during that period generate the credit.
The veteran must meet the federal WOTC definition of a Qualified Veteran, but Maryland’s certification is independent. Commerce does not require federal WOTC certification with the application, though it may request supporting documentation.
Up to five qualified veteran employees per taxable year, for a maximum total credit of $9,000 per employer per year.
Legal Notices and Required Language
This credit is authorized by:
Related federal program:
Related Maryland program for new hires (2021 and later):
Program reports:
Applicants should consult the statute and applicable regulations for the complete legal requirements governing this tax credit.
Contact
For the Hire Our Veterans Tax Credit (tax years 2017–2020):
Cindy Zeng
Tax Specialist
Maryland Department of Commerce
Office of Finance Programs
Email: [email protected]
For the Job Creation Tax Credit (tax year 2021 and later):
Caroline Kimani
Tax Specialist
Maryland Department of Commerce
Office of Finance Programs
Email: [email protected]