State Income Tax Credit Match - Work Opportunity Tax Credit Workforce Development & Adult Learning

Maryland recently passed legislation that creates a state income tax credit match for the federal Work Opportunity Tax Credit (WOTC). WOTC is a federal tax credit program which incentivizes employers to hire individuals with barriers to employment. Maryland has created a nonrefundable state income tax credit which provides a credit equal to 50% of the federal WOTC calculated using only eligible Maryland employees.

The Maryland Work Opportunity Tax Credit is effective July 1, 2022 and is applicable to all taxable years beginning after December 31, 2021, but before January 1, 2029. The credit must be taken on the current return. There is no carry forward to any other taxable year.

Taxpayers will be able to claim the new state Work Opportunity Tax Credit on their respective 2022 tax credit forms when they file their annual returns. The 2022 Maryland tax forms will be published soon, and employers will be able to begin taking advantage of this new credit.

Additional questions can be directed to the Comptroller of Maryland’s Taxpayer Services Division by phone at 410-260-7980 or 1-800-638-2937, or by e-mail at taxhelp@marylandtaxes.gov.