Employment Tax Increment Financing
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 those in Pine Tree Development Zones receiving the highest rate.
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 2018, you will have CY2018 and CY2019 to hire the 5 net new qualified employees. Companies are required to file an ETIF report, with DECD, by April 15th of each year (deadline mirrors the State of Maine tax filing deadline) to remain in program compliance. If a company is eligible to receive a ETIF reimbursement, they will receive those funds, from Maine Revenue Services, in July.
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.
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Step One: Make sure you qualify.
Your business will qualify for ETIF if you meeting the following criteria:
- Is a non-retail, 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 2018 Income Guidelines (PDF) to determine annual income requirements.
Step Two: Apply for preliminary approval by December 1st of the year for which you are seeking reimbursement.
Complete and review the ETIF application form, with your assigned Governor's Account Executive
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: Apply for your reimbursement by April 15th of the following year.
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. In an ongoing effort to improve our administration of these programs, and consolidate reporting efforts, if your company is enrolled in both the ETIF and Pine Tree Development Zone Programs, the deadline by which you must submit your CY17 annual report has been extended to mirror the ETIF reporting deadline for CY17, as follows.
CY2017 ETIF reimbursement request filing deadline: Tuesday, April 17, 2018*
PTDZ annual report filing deadline: Tuesday, April 17, 2018*
*Due to April 15 falling on a Sunday and April 16 being a State holiday
Companies enrolled in the ETIF program, prior to January 1, 2018, will be sent an annual reminder and instructions for the online filing of their ETIF report/reimbursement in late February/early March.