Employment Tax Increment Financing

Employment Tax Increment Financing (ETIF) is a state program that helps new and established Maine businesses to hire new employees by refunding from 30-80% of the state withholding taxes paid by the business for up to ten years. The reimbursement rate rises with the level of local unemployment, with those in Pine Tree Development Zones receiving the highest rate.

In 2013 alone, the program helped almost 126 Maine companies claim $13 million in reimbursements for more 8,550 new, well-paid jobs with retirement and health care benefits.

If your business plans to hire 5 or more new, full-time employees over a two-year period, you may be eligible for ETIF. Retail-only and not-for-profit businesses are not eligible for ETIF.

Qualifying businesses can begin the application and approval process as soon as they reach the point where they plan on hiring 5 or more new employees over the next two years. They then typically apply for and receive their reimbursement in the first quarter of the next fiscal year.

Businesses in Pine Tree Development Zones will enroll in the ETIF program as part of their PTDZ application, with a minimum of at least 1 new hire.

Here’s how the process works.

The files below are posted in Adobe Reader and Microsoft Word. Adobe Reader files require the free Adobe Reader software. Microsoft Word files require either Microsoft Word or the free Word Viewer software.

Step One: Make sure you qualify.

Will you hire 5 or more new, full-time employees for your established, non-retail, for-profit business over a two-year period? OR Will you move your business and employees to Maine or start a business in the state with five or more new full-time hires within the next two years?

Do you offer those new employees a group health care plan and Employee Retirement Security Act (ERISA)-qualified retirement plan such as a 401-K or pension plan?

Is the average annual income of each new employee higher than the average for the county you do business in? Use the 2014 EDP Income Guidelines (PDF) listing county averages to determine qualified employees and their incomes.

Step Two: Apply for preliminary approval by December 1st of the year for which you are seeking reimbursement.

To apply for your ETIF you will need the application sample (Excel) and application form (Excel). You will need to print out two copies of the application form.

Use the application instructions to fill out both copies of the application form and mail them to the address listed. You should receive approval within several weeks.

Step Three: Become a State Vendor in order to receive reimbursement.

In order for the state to compensate you, you will need to complete and send in a Vendor Activation Form (PDF) using the Vendor Form Instructions (PDF). You only need to do this once to establish your business as a vendor.

Step Four: Apply for your reimbursement by April 15th of the following year.

Once you've been approved, DECD will send you a notification to file your reimbursement request in February or March.

Use the DECD approval letter, which outlines your base level of employment and your reimbursement rate, and the ETIF Reimbursement Request Instructions (PDF) to fill out the ETIF reimbursement request after logging into your account (click here to log in).

Step Five: Don’t forget to keep your employee documentation current, all W-2s, and records of health insurance and retirement contributions and other benefits, for potential audit.