This program provides a State income tax credit to small businesses for hiring qualified veterans based on wages paid to those veteran employees.
BENEFITS
A Maryland employer may qualify for an income tax credit equal to 30% of up to the first $6,000 of wages paid to a qualified veteran employee during the first year of employment if the first year of employment falls between tax year 2017 and 2020. The maximum tax credit is $1,800 per qualified veteran employee. For positions created in tax year 2021 and later, please refer to the
Job Creation Tax Credit.
ELIGIBILITY
Qualified Employer
A qualified employer is a “small business” operated by an individual, a partnership, a limited partnership, a limited liability partnership, a limited liability company, or a corporation that employs 50 or fewer full-time employees.
Qualified Veteran Employee
- Must have been hired on or after January 1, 2017;
AND
- Must have served in the active Armed Forces and have been discharged or released from that service under honorable circumstances.
“Armed Forces” means the United States Army, Navy, Marine Corps, Air Force, & Coast Guard, including related reserve components;
AND
- Must have served on active duty (not including training) in the Armed Forces for more than 180 days, OR have been discharged or released from active duty for a service-connected disability; AND 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;
AND
- Must be a Qualified Veteran for purposes of the Federal Work Opportunity Tax Credit, as follows:
- Be a veteran who is a member of a family that received SNAP benefits (food stamps) for at least a 3-month period during the 15-month period ending on the hiring date;
OR -
Be a disabled veteran entitled to compensation for a service-connected disability, who has been hired within 1 year after discharge or release from active duty OR unemployed for at least 6 months in the year ending on the hiring date;
OR -
Be a veteran who has been unemployed for at least 4 weeks in the year ending on the hiring date.
-
LIMITATIONS
- This credit is only available for wages paid in the qualified veteran’s first year of employment.
- A qualified employer may claim up to 5 qualified veteran employees for each taxable year.
- The total amount of credits available in a year is capped at $500,000, and approvals of the tax credit certifications are on a first-come, first-served basis.
- The tax credit is not refundable.
- The tax credit cannot be carried forwards or backwards.
APPLY
- A small business must submit the Application Forms A & B, Qualified Veteran Employee’s Self-Certification Form(s), copies of W-2s and/or paystubs, and copies of DD214 or equivalent official discharge forms to the Maryland Department of Commerce (Commerce) for the certification.
- Commerce will certify or deny an application within 45 days after the receipt of a “complete” application.
CLAIM TAX CREDIT
After receiving the tax credit certification from Commerce, the employer must file a tax return with the Comptroller of Maryland for the taxable year in which the certification was issued using Maryland Tax Form 500CR. Maryland Tax Form 500CR must be filed electronically with an attached copy of the certification from Commerce. Please note that the credit can be taken against the State income tax ONLY. It is not taken against the county income tax “add-on”. For more information regarding the tax forms and tax return instructions, please visit the
Comptroller of Maryland website.
If the employer needs tax information or guidance beyond the scope of the information which is required to apply for the Hire Our Veterans Tax Credit program, please contact the
Comptroller of Maryland. Commerce cannot dispense tax advice.
RESOURCES
