Enterprise Zone Tax Credit (EZ)

​​​​​​The EZ program provides real property and state income tax credits for businesses located in a Maryland enterprise zone in return for job creation and investments. Businesses located in Focus Areas may be also qualified for personal property tax credits on new investment in personal property and enhanced income tax credit for creating new jobs.

There are currently 28 enterprise zones and focus areas in two jurisdictions.

County Enterprise Zone Acres Expires
AlleganyRt. 220 South-Allegany County38012/14/2019
Cumberland-Allegany County 7,7836/14/2022
Frostburg-Allegany County 27512/14/2014
Baltimore City Baltimore City 13,4536/14/2022
Baltimore County North Point-Baltimore County 3,82112/14/2015
Southwest Baltimore County 1,3046/14/2023
Woodlawn Baltimore County3956/16/2021
CecilCecil County 4,7196/14/2023
DorchesterCambridge-Dorchester County 1,6616/14/2023
Hurlock Enterprise Zone6586/14/2020
GarrettSouthern Garrett Industrial Park25412/14/2016
Northern Garrett Industrial Park10712/14/2018
HarfordAberdeen/Havre de Grace8,9366/14/2016
Edgewood/Harford County3,9596/14/2024
Montgomery Olde Towne-Gaithersburg2846/14/2018
Glenmont2356/14/2023
Long Branch –Takoma Park1256/14/2023
Wheaton4916/14/2019​
Prince George'sPrince Georges County 7,27512/14/2019
Somerset Crisfield-Somerset County 4336/14/2016
Princess Anne-Somerset County 1,1556/14/2023
Washington Town of Hancock1,85012/14/2015
Hagerstown-Washington County 4,09412/14/2022
WicomicoSalisbury-Wicomico County 4,22012/14/2022
Fruitland-Wicomico County 1336/14/2015
Worcester Berlin-Worcester County 1,13412/14/2016
Pocomoke City9266/14/2022
Snow Hill2336/14/2022
Focus Areas
Baltimore City Baltimore City 12/14/2017
Prince George'sPrince George's County12/14/2014


​Enterprise Zone Map

Click the Legend button and browse the map below to see where Enterprise Zones are located. Or enter an address in the search bar to see if your business falls within an Enterprise Zone. 


BENEFIT

Income Tax Credits:

There are two types of income tax credits for businesses in an Enterprise Zone:

  1. The General Income Tax Credit – The one-time $1,000 tax credit for each qualified new employee filing a newly created position in an enterprise zone, or one-time $1,500 credit for each qualified new employee in an enterprise zone focus area. 
  2. The Income Tax Credit for Economically Disadvantaged Employees – A three-year period tax credit for each qualified new economically disadvantaged employee, earned at the following amounts:
     
 Enterprise ZoneFocus Area
First Year$3,000$4,500
Second Year$2,000$3,000
Third Year$1,000$1,500


Property Tax Credits:

The property tax credits benefits differ by whether a business is located in an enterprise zone or an enterprise zone focus area:

  1. Enterprise Zone
    1. Real Property Tax Credit – A ten-year tax credit against local real property taxes on a portion of real property expansion, renovation or capital improvement. The amount of credit is 80% of the "eligible assessment" in each of the first 5 years, and the credit deceases 10% annually (70%, 60%, 50%, 40%, 30%) for the subsequent 5 years.
  2. Enterprise Zone Focus Area
    1. Real Property Tax Credit for Focus Area– A ten-year tax credit against local real property taxes on a portion of real property expansion, renovation or capital improvement within a focus area. The amount of credit is 80% of the "eligible assessment" in each of the entire ten-year period.
    2. Personal Property Tax Credit – A ten-year tax credit against local personal property taxes on new investment in personal property within a focus area. The amount of credit is 80% of the "eligible assessment" in each of the entire ten-year period.
       

ELIGIBILITY

Not every business located in an enterprise zone is eligible to receive tax credit. In order to claim the credit, the business must be certified by the local enterprise zone administrator as eligible for the credit.

Income Tax Credits:

General Requirements  

Not every new employee hired by a business located in an enterprise zone is eligible for one of the enterprise zone income tax credits. The following requirements apply to both the general income tax credit and the income tax credit for hiring economically disadvantaged employees:

  • The employee must have been hired after the business was located in the enterprise zone or focus area, or after the enterprise zone or focus area is designated,
  • The employee must have been employed for at least 35 hours per week for six months (or 12 months in a Focus Area) before or during the taxable year in which the credit is taken,
  • The employee must spend at least 50% of all work time in the enterprise zone or on activities of the business resulting from its location in the enterprise zone or focus area,
  • The employee must have been hired to fill a new position. That is, the firm's number of full-time positions must increase by the number of credits taken, and
  • The employee must earn at least 150% of the federal minimum wage.

Requirements for Economically Disadvantaged Employees:

The following requirements apply the income tax credit for hiring economically disadvantaged employees in addition to the general requirements:

  • To claim the income tax credit for hiring the economically disadvantaged employees, the business must obtained the certification from the Maryland Department of Labor, Licensing and Regulation, and
  • To receive the income tax credit, an economically disadvantaged employee must remain in the position for three years. 

Property Tax Credits:

In order for a business to qualify for the property tax credit, it must meet all state and local eligibility requirements. To be qualified the business must satisfy one of the two specific statutory requirements, which are that business must either (1) make and investment in capital improvements, or (2) hire new employees. The business must contact the local enterprise zone administrator regarding the local eligibility requirements because the local eligibility requirements vary by the enterprise zone.

APPLY

The business must apply to the local enterprise zone administrator for certification.

RESOURCES

Enterprise Zone Map

CONTACT

For more information about Maryland Enterprise Zone Tax Credit contact:

Emiko Kawagoshi, Tax Specialist
DBED, Office of Finance Programs
(410) 767-4041
(877) 821-0099
 
Mark A. Vulcan, Director, Tax Incentives
DBED, Office of Finance Programs
(410) 767-6438
(877) 821-0099

FREQUENTLY ASKED QUESTIONS

  • What if I do not have enough income tax liability to use all of the credit?
    • ​If the tax credits exceed the tax imposed for that year, they may be applied to the next year’s taxes until the credit is used or five tax years have passed.

  • How do I claim the enterprise zone employment tax credit?
    • Maryland Tax Form 500CR is used to claim this credit. Simply fill it out and include it in your state tax return. Also, note that the credit is taken against the state income tax only. It is not taken against the County income tax "add-on."

  • What Is the Income Tax Credit?
    • Maryland’s Enterprise Zone Program provides special tax credits to
      encourage businesses in the enterprise zone to create new jobs. The
      credits are more valuable than deductions because credits are subtracted directly from income tax liability. There are actually two types of income tax credits for firms in an enterprise zone: a general income tax credit and a larger income tax credit for hiring economically disadvantaged employees. Firms in focus areas receive enhanced credits.

      • General Enterprise Zone Income Tax Credit: This credit is available for any worker who meets the requirements of employment in a zone.
      • Enterprise Zone Income Tax Credit for Economically Disadvantaged Employees: A state income tax credit available for hiring economically disadvantaged employees to fill newly created positions.

  • How much credit does a business receive?
      1. ​The general income tax credit is $1,000 for each qualified new employee filling a newly created position in an enterprise zone, or $1,500 for each qualified new employee in a focus area.
      2. The tax credit for economically disadvantaged employees is for a three-year period for each qualified employee, earned at the following flat rates:
      3. ​Enterprise zone​Focus area
        ​First year​$3,000​$4,500
        ​Second year​$2,000​$3,000
        ​Third year​$1,000

        ​$1,500

      In order to receive the full tax credit, an economically disadvantaged
      employee must remain in the position for three years. However, if the disadvantaged employee leaves the firm and is replaced by another employee who is also certified as disadvantaged, the firm may take the remainder of the credit as if the original employee had remained.

  • How do I know I can claim an enterprise zone income tax credit?
    • 1. Local Firm Certification Requirement. Not every business located in an enterprise zone is eligible to claim the income tax credit. In order to claim the credit, the business must be certified by the local zone administrator as eligible for the credit. A locality may establish special requirements for firm certification. Therefore, it is very important for a firm considering expansion of its workforce to contact the local zone administrator for certification.

      2. Other General Requirements. Not every new employee hired by a business located in an enterprise zone is eligible for one of the enterprise zone income tax credits. The following April 2005 requirements apply to both the general credit and the credit for hiring economically disadvantaged employees:


      a. The employee must have been hired after the business was located in the zone or after the zone was designated.
      b. The employee must have been employed for at least 35 hours each week for six months (or 12 months in a focus area) before or during the taxable year in which the credit is taken.
      c. The employee must spend half of all work time in the zone or in activity related to the zone.
      d. The employee must have been hired to fill a new position. That is, the firm’s number of full-time positions must increase by the number of credits taken.
      e. The employee must earn at least 150 percent of the federal minimum wage.

      3. Requirements for Economically Disadvantaged Employees. In order to claim the larger tax credit for hiring an economically  disadvantaged employee to fill a newly created position, the firm must obtain a certification of eligibility for each employee. This certification is provided by the Maryland Job Service, Department of
      Labor, Licensing and Regulation.

  • What if a firm relocates into an enterprise zone?
    • If a firm relocates from one site in Maryland into an enterprise zone, its base employment remains the same as it was at the previous site. However, if the firm's total  employment increases, then the new positions may be eligible for either enterprise zone income tax credit. A firm moving from outside the State into an enterprise zone is considered to be a new Maryland business. All of its employees might be eligible for the credit.

  • Can these credits be combined?
    • ​You cannot receive both state enterprise zone income tax credits for the same individual. However, you may be able to combine an enterprise zone tax credit with another state income tax credit like the Job Creation Tax Credit.

  • What if I do not have enough income tax liability to use all of the credit?
    • ​If the tax credits exceed the tax imposed for that year, they may be applied to the next year’s taxes until the credit is used or five tax years have passed.