Can you reduce your taxes due to the Coös County Job Creation Tax Credit?
The Coos County Job Creation Tax Credit was created in 2008 and provides a credit against New Hampshire business taxes for every full-time, year-round employee that was hired during the year. To qualify for the credit, each new employee must receive wages paid, including amounts paid for medical and dental benefits, equal to or greater than 150 percent of the New Hampshire state minimum wage. The minimum wage is currently set at $7.25 for New Hampshire, which is consistent with the Federal rate.
If the employer pays wages that equals or exceeds 150 percent of minimum wage, they will receive a credit of $750 per employee. The credit has a maximum benefit of $1,000 per employee if the employer pays wages exceeding 200 percent of the minimum wage. This credit is renewable for four consecutive years, giving an employer a total of 5 years of benefits. The initial credit has been extended five years, so that the year ended December 31, 2018 is the latest tax year an employer can take the credit for the first time. If the credit is elected for the year ended December 31, 2018, employers can take advantage of the credit for the following four consecutive years, until the year ended December 31, 2022.
A “new employee” for purposes of this credit does not include an employee that has transferred to a new position because of a merger or restructuring. Employees who are laid-off and rehired within 270 days to the same position also do not qualify as a new employee for the purposes of this credit. Additionally, a new employee must be on the payroll for at last 90 days before the employer can initially claim the credit. If the job the employer created is terminated for any reason during the five consecutive tax periods after the initial application, the employer cannot claim the credit for the years that the position is not in existence.
The Job Creation Tax Credit is first applied to the Business Enterprise Tax (BET). Any remaining portion of the credit can then be used against the Business Profits Tax (BPT). If there is still an unused portion of the credit after being applied to these taxes, the remaining credit may be carried forward for up to five years.
Employers that are applying for the credit for the first time need to file an application with the Department of Resources and Economic Development on or before the three months after the close of the business’ tax year. The Department will then notify the business of the amount of credit that they are eligible to claim. Once the business is notified of the credit amount, they can record the credit on New Hampshire Form DP-160, Schedule of Credits, which should be filed along with the business tax return. Employers can obtain an application for the Coos County Job Credit on the New Hampshire Department of Revenue website.
According to the New Hampshire Department of Revenue, at least seventeen taxpayers have taken advantage of the credit since its inception in 2008, creating over 85 new jobs. The amount of credits provided by the state for the years 2009 – 2013, has totaled $156,350, with approximately $68,000 provided in 2013 alone.
Please remember these are general rules and you should always speak with your trusted advisor about your particular situation.
Amanda Dubs is a Berlin, New Hampshire resident practicing as a Certified Public Accountant at Gamwell Caputo Kelsch & Co., PLLC in Conway, New Hampshire.
