As paid sick leave is expanded in the state, small businesses may be able to utilize a new tax credit to help offset the cost, the state said Monday.
The Small Business Relief Tax Credit is available for businesses with fewer than 14 employees that meet certain criteria. The credit's are worth $500 per employee, totaling $7,000 per business for the year. Any type of business may apply for the credit, including nonprofits.
Businesses may apply each year for each employee they have who makes less than 250 percent of the annual federal poverty guidelines for a single person home. Currently that poverty guideline is set at $30,350, so employees making less than $75,875 would qualify.
Applications for the credit will be accepted by the Maryland Department of Commerce beginning Jan. 3, 2019.
The tax credit was created in response to the passing of the Maryland Health Working Families Act, passed by the Maryland General Assembly in early 2018. The Assembly overrode a veto from Governor Larry Hogan to pass the legislation. The bill requires business with 14 or fewer employees to provide unpaid sick leave.
“Maryland’s small business community employs more than one million people, making it one of our most powerful and important economic assets,” said Maryland Commerce Secretary Mike Gill. “We encourage small businesses that are paying sick leave to consider applying for this credit, which will help them continue to be able to support their employees.”