For an estimate of the value of ETIF and other key tax incentive programs for your business, click here.
Employment Tax Increment Financing (ETIF) is a state program that helps new and established Maine businesses 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 companies who are Pine Tree Development Zone certified receiving the highest reimbursement rate (80%).
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 within two calendar years of becoming certified. For example, if your company is ETIF certified in 2022, you will have CY2022 and CY2023 to hire the 5 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/early August.
A business who is 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 5 or more net new employees within two calendar years of becoming PTDZ certified.
Here's how the process works.
The files below are posted in Adobe Reader and Microsoft Excel. Adobe Reader files require the free Adobe Reader software. Microsoft Excel files require either Microsoft Excel or similar spreadsheet software.
Step One: Make sure you qualify.
Your business will qualify for ETIF if you meet the following criteria:
- Is a non-retail, non-public utility, for-profit business.
- Hire 5 or more new, full-time employees within two calendar years of becoming ETIF certified.
- Move your business and employees to Maine, or start a business in Maine, with five or more new full-time qualified hires, within two calendar years of becoming ETIF certified.
- Offer those new employees access to a group health care plan and Employee Retirement Security Act (ERISA)-qualified retirement plan, such as a 401-K or pension plan.
- The average annual income, of each new employee, will be higher than the average for the county you do business in. 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))
Step Two: Apply for preliminary approval by December 31st of the year for which you are seeking reimbursement.
Complete and review the ETIF application form.
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). You only need to do this once to establish your business as a vendor.
Step Four: Submit your annual ETIF report to apply for your reimbursement by March 15th of the following year. (For example, your CY2021 report will be due March 15, 2022)
After certification, 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 Employment Tax Increment Financing (ETIF). To ensure full program compliance, reporting is mandatory. Annual reports must be submitted by March 15th of each year. Companies that are ETIF certified, prior to December 31st each year, will be sent an annual reminder and instructions for online filing of their annual report in late February/early March.
Step Five: Remember to keep your employee documentation current including all W-2’s, plus records of health insurance and retirement contributions and other benefits, for potential audit.