Employment Tax Increment Financing (ETIF)

Get an estimate of the value of ETIF and other key tax incentive programs for your business

Employment Tax Increment Financing (ETIF) is a state program that helps new and established Maine businesses hire new employees by paying the business 1.35%-3.6% of qualified employee income up to ten years. The reimbursement rate rises with the level of local unemployment, with companies that are certified in the Pine Tree Development Zone program receiving the highest reimbursement rate (3.6%).

If your business plans to hire five 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 plan to hire 5 or more new employees within two calendar years of becoming certified. For example, if your company is ETIF-certified in 2021, you will have CY2021 and CY2022 to hire the five net new qualified employees. Companies are required to file an ETIF report with DECD by March 15th of each year to remain in program compliance. If a company is eligible to receive an ETIF reimbursement, they will receive those funds from Maine Revenue Services in late July. 

A business seeking Pine Tree Development Zone (PTDZ) certification will enroll automatically in the ETIF program as part of their PTDZ application if they plan to hire five or more net new employees within two calendar years of becoming PTDZ certified.

ETIF is governed by MRS Title 36 §6751- §6761 and amended program rule number 2020-009, the Employment Tax Increment Financing Rule.

Here's how the process works:

Step One: Make sure you qualify.

Your business will qualify for ETIF if it:

  • Is a non-retail, non-public utility, for-profit business.
  • Hires five or more net new, full-time, qualified employees within two calendar years of becoming ETIF-certified.

A qualified job is defined as one that:

  • Provides a total income above the county average. Wages, bonuses, commissions, and employer payments toward benefits such as retirement and health insurance count towards the total income measure. Use the 2022 Income Guidelines (PDF) to determine annual income requirements. (The previous year's income guidelines can be found here: 2021 Income Guidelines (PDF).)
  • Includes access to a group health care plan.
  • Includes access to group retirement benefits, subject to ERISA, such as a 401-K or pension plan.

Step Two: Apply for preliminary approval.

  1. Submit a But For letter prior to any public announcement of your project. The letter is your statement that, without ETIF benefits, your business would not be creating new jobs in Maine.
  2. DECD acknowledges receipt of your But For letter and gives the green light to submit a full application.
  3. Submit a completed application.
  4. DECD reviews the application and, if all requirements are met, approves it.
  5. Once you are approved, you are clear to file for an ETIF payment during the next reporting season, which occurs each March.

2022 application forms:

Step Three: Become a State Vendor to receive reimbursement.

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

Step Four: Submit your annual ETIF report.

  • To receive payment, you must fill out and submit an annual report by March 15th each year. (For example, your CY2022 report will be due March 15, 2023.)
  • In late January each year, DECD mails an annual reminder and instructions for online filing of reimbursement requests.
  • The Legislature charges DECD with collecting information necessary for the State to administer the ETIF program. To ensure full program compliance, reporting is mandatory. 

Remember to keep your employee documentation current, including all W-2s, plus records of health insurance, retirement contributions, and other benefits.