Job Creation Tax Credit (JCTC)
About this page. This page explains the Job Creation Tax Credit in plain language. The credit is authorized under Maryland Tax-General Article §6-301 and was most recently amended by Senate Bill 388 (Chapter 351, 2026), effective July 1, 2026. If anything on this page conflicts with the statute or regulations, the statute and regulations control.
Program Status
The program is currently active.
Applications are accepted through the Commerce online portal on a rolling basis. There is no application fee. Online applications are not available at this time. Please reach out directly to the contact listed below.
Sunset date: The credit remains in effect until January 1, 2032, subject to further extension by the Maryland General Assembly. The sunset was extended from January 1, 2027 by Senate Bill 388 (Chapter 351) during the 2026 session.
Important. Significant changes took effect October 1, 2021. Positions filled before October 1, 2021 follow the old rules; positions filled on or after that date must meet additional employment standards. The 2026 sunset extension did not change those standards. See “Key Eligibility Requirements” for which rules apply to your positions.
What This Program Does
The Job Creation Tax Credit (JCTC) provides a Maryland state income tax credit to:
- eligible businesses that locate or expand in Maryland and create a minimum number of net new full-time positions, and
- small businesses that hire qualified veteran employees.
The credit ranges from $2,500 to $6,000 per qualified position, depending on the business size, the position’s location, and whether the position is filled by a qualified veteran.
Who This Is For
The program has two separate tracks:
- Standard JCTC — for businesses locating or expanding in Maryland that create a minimum number of new full-time positions.
- Small Business Veteran Track — for small businesses (50 or fewer full-time employees) that hire qualified veteran employees, with no minimum job count.
The table below shows the key differences. The rest of this page covers both tracks; sections that apply only to one are labeled.
Standard JCTC | Small Business Veteran Track | |
|---|---|---|
Who qualifies | Businesses locating or expanding in Maryland in a qualifying industry | Small businesses (≤50 full-time employees) hiring qualified veterans |
Job creation minimum | 60 jobs statewide, 25 in a Priority Funding Area, or 10 in low-income/low-employment counties | At least 1 qualified veteran (no overall job count required) |
Credit per job | $3,000 base; $5,000 in a revitalization area; $4,000 / $6,000 if the position is filled by a qualified veteran | $2,500 per qualified veteran position (filled for at least 1 year) |
Maximum claimed per year | Up to $1 million per business per credit year | Up to 5 qualified veterans per credit year |
Declaration of Intent before hiring | Required | Not required |
Application stages | Notice of Intent → Preliminary Application → Final Application | Final Application only |
Definitions
Revitalization area. Affects the credit amount. Includes state enterprise zones, federal enterprise zones, federal empowerment zones, DHCD sustainable communities, and Tier 1 Counties: Allegany, Baltimore City, Caroline, Dorchester, Garrett, Kent, Somerset, Washington, and Wicomico.
Priority Funding Area (PFA). Affects the minimum job count required. Includes state enterprise zones, federal empowerment zones, DHCD sustainable communities, Baltimore City, incorporated municipalities, the area between the I-495 beltway and Washington, D.C., the area between the I-695 beltway and Baltimore City, and any area designated by a county as a priority funding area under State Finance and Procurement Article §5-7B-03(c).
Qualified position. A new full-time position of indefinite duration that meets all wage and employment requirements (see Key Eligibility Requirements).
Full-time position. Requires at least 840 hours of an employee’s time during at least 24 weeks in a six-month period (about 35 hours per week on average).
Qualified veteran employee. Someone who is (1) honorably discharged or released under honorable circumstances from active military, naval, or air service; and (2) qualifies as a “qualified veteran” for purposes of the Federal Work Opportunity Tax Credit (WOTC).
Small business. A sole proprietor, partnership, limited partnership, limited liability partnership, limited liability company, or corporation with 50 or fewer total full-time employees.
Confirm your county's status. Both the revitalization area Tier 1 County list and the 10-job county list are determined by Census data and are updated on the Commerce website as new data becomes available. Data releases have lagged in recent years. Confirm the current status of your county with Commerce before applying.
Program Duration and Limits
Annual program cap
The program is capped at $4 million in total credits per calendar year. Credits are certified on a first-come, first-served basis based on when Commerce receives the final application and the availability of credits.
Per-business limits
- Standard JCTC: up to $1 million in credits per business per credit year
- Small Business Veteran Track: up to 5 qualified veteran employees per credit year ($12,500 maximum at $2,500 each)
Carryforward
Unused credits may be carried forward through the fifth taxable year following the credit year. The credit is not refundable.
Sunset
The credit remains in effect until January 1, 2032. The sunset date was extended from January 1, 2027 by Senate Bill 388 (Chapter 351, 2026), effective July 1, 2026. The employment standards for positions filled on or after October 1, 2021 were not changed by the extension.
Cannot combine with One Maryland Tax Credit
A business may not receive both the One Maryland Tax Credit and the Job Creation Tax Credit for the same qualified positions, and may not claim both in the same tax year.
How the Program Works
The credit equals a fixed dollar amount per qualified position. The amount depends on which track the business is using, where the position is located, and whether the position is filled by a qualified veteran.
Credit amount per qualified position
Situation | Per-job credit | Track |
|---|---|---|
Standard new job | $3,000 | Standard JCTC |
Standard new job in a revitalization area | $5,000 | Standard JCTC |
New job filled by a qualified veteran | $4,000 | Standard JCTC |
New job filled by a qualified veteran in a revitalization area | $6,000 | Standard JCTC |
Small business hires a qualified veteran (no minimum job count) | $2,500 | Small Business Veteran Track |
Job creation minimum (Standard JCTC only)
To qualify under the Standard JCTC track, the business must create the minimum number of net new full-time positions for its facility location:
Minimum new jobs | Where the facility is located |
|---|---|
60 | Anywhere else in Maryland |
25 | A Priority Funding Area (PFA) — see Definitions |
10 | A county with annual average employment below 75,000 OR median household income below two-thirds of the statewide median: Allegany, Baltimore City, Calvert, Caroline, Carroll, Cecil, Charles, Dorchester, Garrett, Kent, Queen Anne’s, Saint Mary’s, Somerset, Talbot, Washington, Wicomico, or Worcester |
This list is determined by Census data and is updated annually and as new data becomes available. Confirm the current list with Commerce before applying.
Small Business Veteran Track: no minimum job count. A small business may apply after at least one qualified veteran employee has filled a new full-time position for at least 12 months.
When jobs must be created and filled
- Standard JCTC: the minimum number of net new positions must be created within a 24-month period.
- All positions: must be filled for 12 months before the business applies for final certification.
- All positions: must be at a single Maryland location. A business may have multiple eligible locations, but each must be certified separately and meet the program requirements on its own.
Key Eligibility Requirements
Eligibility rules depend on when the qualified position was filled. Two sets of rules apply.
Requirements for all positions
- Declaration of Intent (Standard JCTC only): the business must notify Commerce of its intent to seek JCTC certification before hiring any employees claimed for the credit. The Small Business Veteran Track does not require a Declaration of Intent.
- Final certification: the business must be certified by Commerce as a qualified business entity eligible for the credit.
- Qualifying industry (Standard JCTC only): the facility must be primarily engaged in a qualifying activity (see “Qualifying Industries” below).
- Single location: the expansion or new business must be at a single Maryland location. A business may have more than one eligible location if each is certified and meets the requirements on its own.
- Net new positions: the minimum number of net new positions must be created within a 24-month period.
- 12-month fill: each position must be filled for 12 months before the business applies for final certification.
Positions filled before October 1, 2021
- Position must pay at least 120% of the Maryland state minimum wage in effect for the relevant year
Positions filled on or after October 1, 2021
Each position must meet all of these requirements:
- Wage: pay at least the prevailing wage rate for an employee classification with a prevailing wage rate under State Finance and Procurement Article §17-201, OR 150% of the Maryland state minimum wage for any other employee classification
- Career advancement: provide career advancement training
- Collective bargaining: afford the employee the right to collectively bargain for wages and benefits
- Paid leave: provide paid leave
- Unemployment insurance: be considered covered employment for purposes of unemployment insurance benefits under Title 8 of the Labor and Employment Article
- Workers’ compensation: entitle the employee to workers’ compensation benefits under Title 9 of the Labor and Employment Article
- Health insurance: offer employer-provided health insurance benefits with monthly premiums that do not exceed 8.5% of the employee’s net monthly earnings
- Retirement: offer retirement benefits
Maryland state minimum wage schedule
JCTC uses the Maryland state minimum wage. County minimum wage rates do not apply to this program.
The Fair Wage Act of 2023 accelerated the state minimum wage to $15.00/hour beginning January 1, 2024 and it has remained at that rate.
Effective date | State minimum wage | 120% of minimum | 150% of minimum |
|---|---|---|---|
1/1/2020 | $11.00 | $13.20 | $16.50 |
1/1/2021 | $11.75 | $14.10 | $17.63 |
1/1/2022 | $12.50 | $15.00 | $18.75 |
1/1/2023 | $13.25 | $15.90 | $19.88 |
1/1/2024 | $15.00 | $18.00 | $22.50 |
1/1/2025 | $15.00 | $18.00 | $22.50 |
1/1/2026 | $15.00 | $18.00 | $22.50 |
If the state minimum wage increases, the wage for a qualified position must increase correspondingly for the position to remain qualified. This applies at final certification and throughout the recapture period. Confirm the current rate at Maryland Department of Labor.
Qualifying Industries (Standard JCTC)
Standard JCTC eligibility is limited to facilities primarily engaged in one of these activities:
- Manufacturing or mining
- Transportation or communications
- Agriculture, forestry, or fishing
- Public utility or warehousing
- Research, development, or testing
- Biotechnology
- Computer programming, data processing, or other computer-related services
- Central services for financial, real estate, or insurance services
- Operation of central administrative offices or a company headquarters (other than the headquarters of a professional sports organization)
- Business services firms (only if located in a Maryland Priority Funding Area)
- Entertainment, recreation, cultural, or tourism-related activities in a multi-use facility located in a revitalization area, if the facility generates at least 1,000 new full-time-equivalent filled positions in a 24-month period and is not primarily used by a professional sports franchise or for gaming
- Growth, processing, or dispensing of cannabis (as of July 1, 2023)
A “central administrative office” is a facility where a business entity’s central management or administrative functions are handled on a regional or national basis. This includes offices where personnel, planning, general management, accounting, finance, purchasing, advertising, legal, data processing, and research and development functions are performed.
Job Maintenance and Recapture
Once the credit is awarded, qualified positions must remain filled for at least three years following the credit year.
If the business reduces its qualified workforce during this three-year period, the credit may be partially or fully recaptured:
- Below the minimum threshold: if the number of qualified positions falls below the minimum (60, 25, or 10 depending on location), all credits used must be repaid in full.
- More than 5% decline (but above the threshold): if the number of qualified positions falls more than 5% below the average number of qualified positions during the credit year but remains above the threshold, the amount of credit to be repaid is reduced in proportion to the decline.
Important. If the state minimum wage increases during the recapture period, the wages for qualified positions must increase correspondingly to keep those positions qualified.
During the recapture period, the business must provide information to Commerce verifying that the qualified positions still exist for the three taxable years following the credit year.
Documents You Will Need to Apply
Different application forms apply to different stages and tracks.
Standard JCTC — multi-stage applications
- Notice of Intent Form (PDF) - PDF - 580.57 KB — submit before hiring qualified employees
- Employment Affidavit (PDF) - PDF - 20.73 KB
- Preliminary Application — positions filled on or after Oct 1, 2021 (PDF) - PDF - 359.06 KB
- Preliminary Application — positions filled before Oct 1, 2021 (PDF) - PDF - 330.15 KB
- Final Application (PDF) - PDF - 317.87 KB
- List of Qualified Employees Form (Excel) — must accompany the Final Application
- Annual Report Form (PDF) - PDF - 340.65 KB — for the three-year recapture period
Small Business Veteran Track — additional
- Qualified Veteran Employee’s Self-Certification Form (PDF) - PDF - 632.32 KB — one for each qualified veteran
- Supporting documentation of each veteran’s federal WOTC qualifying status
Commerce may request additional documentation to verify eligibility.
How to Apply
Standard JCTC — three stages
- Notice of Intent. Notify Commerce of the business’s intent to seek JCTC certification before hiring any employees being claimed for the credit.
- Preliminary Application. Encouraged but not required. Submit the Preliminary Application and Employment Affidavit to determine preliminary qualification.
- Final Application. Once positions have been filled for 12 months, submit the Final Application and List of Qualified Employees Form. Commerce calculates the credit amount the business is entitled to claim.
Small Business Veteran Track — final only
Small businesses skip the Notice of Intent and Preliminary Application. Submit a Final Application once a qualified veteran has filled a new full-time position for at least 12 months.
Where to apply
Apply through the Commerce online portal. There is no application fee. Online applications are not available at this time. Please reach out directly to the contact listed below.
Application Review Timeline
- Preliminary Certificate: approximately 30 days after Commerce receives a complete application.
- Final Certificate: approximately 60 days after Commerce receives a complete application.
Processing times are estimates and depend on a complete application with all required documents.
How You Claim the Credit
After Commerce issues a Final Certificate of Eligibility:
- File the Maryland income tax return for the credit year.
- Complete the Form 500CR section of the return.
- Attach a copy of the Final Certificate of Eligibility from Commerce.
Note. The credit applies only to Maryland state income tax. It does not reduce the county income tax add-on.
If the credit is larger than the business’s Maryland state income tax for the year, the unused portion may be carried forward through the fifth taxable year following the credit year.
Frequently Asked Questions
JCTC FAQs
A Maryland state income tax credit for businesses that locate or expand in Maryland and create net new full-time positions, plus a credit for small businesses that hire qualified veteran employees.
The credit remains in effect until January 1, 2032. The sunset was extended from January 1, 2027 by Senate Bill 388 (Chapter 351) during the 2026 session, effective July 1, 2026.
A full-time position requires at least 840 hours of an employee’s time during at least 24 weeks in a six-month period — an average work week of 35 hours.
A Priority Funding Area is a designated growth area where the business qualifies for the JCTC with a reduced job creation requirement of 25 qualified positions instead of 60. PFAs include state enterprise zones, federal empowerment zones, DHCD sustainable communities, Baltimore City, incorporated municipalities, the area between the I-495 beltway and Washington, D.C., the area between the I-695 beltway and Baltimore City, and any area designated by a county as a priority funding area under State Finance and Procurement Article §5-7B-03(c).
A revitalization area is an area where positions earn an increased credit amount ($5,000 instead of $3,000, or $6,000 instead of $4,000 for veteran-filled positions). Revitalization areas include state enterprise zones, federal enterprise zones, federal empowerment zones, DHCD sustainable communities, and Tier 1 Counties.
A PFA changes the number of jobs required to qualify (lower minimum). A revitalization area changes the dollar amount of the credit per job (higher per-job amount). Some areas are both. Some are only one or the other.
A business that qualifies for JCTC may also qualify for other Maryland income tax credits, such as the Enterprise Zone Tax Credit and the More Jobs for Marylanders Tax Credit. A business may not receive the One Maryland Tax Credit and JCTC for the same qualified positions, and may not claim both in the same tax year.
The credit is not refundable. Unused credits may be carried forward for up to five taxable years following the credit year.
Qualified positions must remain filled for three years following the credit year. If the number of qualified positions falls below the minimum threshold (60, 25, or 10), all credits used must be repaid. If the number falls more than 5% below the credit-year average but stays above the threshold, the amount to be repaid is reduced in proportion to the decline.
Any Maryland business entity may qualify. However, the credit only helps an entity that has Maryland state income tax liability. Most not-for-profits owe no income tax, so they will not benefit. A not-for-profit with taxable income from business activities may be able to use the credit.
The JCTC statute requires a business to establish or expand at a single location. In some cases, the addition of new qualified positions causes a business to outgrow its existing space and acquire additional space in close proximity. The Secretary may, based on the facts and circumstances, allow new positions at multiple facilities to be counted.
Generally, those employees would not qualify for the credit. An exception may apply if the business leases space for its business facility from a government entity, since the statute requires a business facility — not a government facility — in Maryland.
The qualified business entity must provide information verifying that the jobs created still exist during the three taxable years following the credit year. Keep payroll and employment records to support the credit.
Generally yes, subject to the Maryland Public Information Act and Maryland Tax-General Article, Title 13, Subtitle 2. The company consents to the release of certain information as part of the application.
Legal Notices and Required Language
This credit is authorized under Maryland Tax-General Article §6-301.
Amending legislation:
- Senate Bill 388 (Chapter 351, 2026) — extended the sunset to January 1, 2032; effective July 1, 2026
- House Bill 278 (2021) - PDF — effective October 1, 2021
- Senate Bill 186 (2021) - PDF — merged the Hire Our Veterans Tax Credit into JCTC
- JCTC Statute — prior to October 1, 2021 (PDF) - PDF - 31.5 KB
Program resources:
- JCTC Informational Flyer (PDF) - PDF - 130.25 KB
- Job Creation Tax Credit — Comptroller of Maryland
- Job Creation Tax Credit Annual Report FY21 (PDF) - PDF - 220.33 KB
Applicants should consult the statute and applicable regulations for the complete legal requirements governing this tax credit.
Contact
Caroline Kimani
Tax Specialist
Maryland Department of Commerce
401 E. Pratt Street
Baltimore, MD 21202
Email: [email protected]
Phone: 410-767-0939