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Health Enterprise Zone Hiring Tax Credit

A Health Enterprise Zone (HEZ) Employer may be eligible for a refundable income tax credit based on wages paid to qualified employees.

A “Health Enterprise Zone Employer” means a HEZ Practitioner, a for-profit entity, or a nonprofit entity that employs qualified employees and provides health care services in a HEZ.

A “Health Enterprise Zone Practitioner” is a health care practitioner who is licensed or certified under the Maryland Health Occupations Article and who provides:

  •  Primary care, including obstetrics, gynecological services,
    pediatric services, or geriatric services;
  •  Behavioral health services, including mental health or
    alcohol and substance abuse services; or,
  •  Dental services.

A “qualified employee” is a HEZ practitioner, community health
worker, or interpreter who:

  1. Provides direct support to a HEZ practitioner; and
  2.  Expands access to services in a HEZ.

A qualified position is a full-time position of indefinite duration, which pays at least 150% of the federal minimum wage, is located in a HEZ, and is newly created as a result of the establishment or expansion of services in a HEZ and is filled. A qualified position does not include a position that is filled for a period of less than 12 months.

A HEZ Employer may claim a refundable credit of $10,000 for hiring a qualified employee in a qualified position in a HEZ, as certified by the Department of Health and Mental Hygiene (DHMH).

The credit may be taken against corporate income tax or personal income tax. Sole proprietorships, corporations and pass through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit. Any credit in excess of the tax liability is refunded to the employer; or refunded to the members if the employer is a pass-through entity.

To qualify for the credit

To be eligible for the credit, the HEZ Employer may create one or more qualified positions within a 24-month period. The $10,000 credit must be taken over a 24-month period, with half of the credit amount allowed beginning with the first year certified.

No credit may be earned for any tax year beginning on or after January 1, 2017.

How the credit is calculated

The credit is calculated by: 

  1. Multiplying the number of qualified employees certified by DHMH in their first year of employment positions by $5,000;
  2. Multiplying the number of qualified employees certified by DHMH in their second year of employment positions by $5,000; 
  3. Adding the amounts in Steps (1) and (2); and 
  4. Reducing Step (3) by any existing recapture amount.

The amount of the credit which will be approved may be limited to budgeted funds available to DHMH.

See Form 500CR Instructions for specific line-by-line instructions.

Documentation required

This credit is available only with an electronically-filed return. A copy of the certification from the DHMH must be included with the electronic return, and the. Form 500CR section of the return must be completed.

Recapture Provisions

If the qualified position is filled for a period of less than 24 months, the tax credit will be recaptured. The tax credit will be reduced on a prorated basis, based on the period of time the position was filled.

Additional Nonrefundable Tax Credit Available

A nonrefundable HEZ Practitioner Tax Credit is available to eligible taxpayers who work in a HEZ. See Maryland Form 502CR, Tax Credits for Individuals or contact DHMH for more information.

Contact

For information on the location of HEZs and the standards which HEZ practitioners must meet to qualify, contact:

Roxanne Hale, MHA, FACHE, CMPE
Director, Office of Primary Care Access
Prevention and Health Promotion Administration
Maryland Department of Health and Mental Hygiene
201 W. Preston
Baltimore, MD 21201
410-767-8649
410-409-0124 C



 
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