Plain Text Law

Title 10 — Subtitle 61. Health Enterprise Zone Initiative

Chapter 01. Health Enterprise Zone Tax Credits

Regulation .01 Objective.Copy Citation

The objective of the Health Enterprise Zone tax credits are to reduce health disparities, improve health outcomes, and reduce health care costs and hospital admissions and readmissions in traditionally underserved communities in the State by encouraging qualified licensed or certified health care practitioners to relocate or expand services in areas designated as Health Enterprise Zones under the Maryland Health Improvement and Disparities Reduction Act of 2012, Health-General Article, §20-1401, et seq., Annotated Code of Maryland, and Tax-General Article, §10-731, Annotated Code of Maryland.

Regulation .02 Purpose.Copy Citation

This chapter describes the procedures that will be used by the Secretary of Health to establish the requirements necessary to qualify for and receive the Health Enterprise Zone tax credits.

Regulation .03 Definitions.Copy Citation

A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Credit year” means the taxable year for which a qualified Health Enterprise Zone practitioner claims a Health Enterprise Zone tax credit.
(2)
“Department” means the Maryland Department of Health.
(3)
“Health Enterprise Zone” has the meaning stated in Health-General Article, §20-1401(e), Annotated Code of Maryland.
(4)
“Health Enterprise Zone employer” means a Health Enterprise Zone practitioner, a for-profit entity, or a nonprofit entity that employs qualified employees and provides health care services in a Health Enterprise Zone.
(5)
“Health Enterprise Zone practitioner” means a health care practitioner who:
(a)
Is licensed or certified under the Health Occupations Article; and
(b)
Provides one or more of the following services in a Health Enterprise Zone:
(i)
Primary care, including obstetrics, gynecological services, pediatric services, or geriatric services;
(ii)
Behavioral health services, including mental health or alcohol and substance abuse services; or
(iii)
Dental services.
(6)
“Hiring tax credit” means the Health Enterprise Zone tax credit set forth under Tax-General Article, §10-731(d)(2), Annotated Code of Maryland.
(7)
“Income tax credit” means the Health Enterprise Zone tax credit set forth under Tax-General Article, §10-731(d)(1), Annotated Code of Maryland.
(8)
“Qualified employee” means a Health Enterprise Zone practitioner, community health worker, or interpreter who:
(a)
Provides direct support to a Health Enterprise Zone practitioner; and
(b)
Expands access to services in a Health Enterprise Zone.
(9)
Qualified Position.
(a)
“Qualified position” means a qualified employee position that:
(i)
Pays at least 150 percent of the federal minimum wage;
(ii)
Is full-time and of indefinite duration;
(iii)
Is located in a Health Enterprise Zone;
(iv)
Is newly created as a result of the establishment of, or expansion of services in, a Health Enterprise Zone; and
(v)
Is filled.
(b)
“Qualified position” does not include a position that is filled for a period of less than 12 months.
(10)
“Secretary” means the Secretary of Health or the Secretary’s designee.

Regulation .04 Income Tax Credits.Copy Citation

A.
The income tax credit is a nonrefundable credit against the State income tax and shall be in an amount equal to 100 percent of the amount of State income tax expected to be due from the Health Enterprise Zone practitioner from income derived from practice in the Health Enterprise Zone for the credit year.
B.
A Health Enterprise Zone practitioner who practices health care in a Health Enterprise Zone may be eligible for an income tax credit available under Tax-General Article, §10-731, Annotated Code of Maryland, if the individual:
(1)
Demonstrates cultural and linguistic competency in the form and manner set by the Department;
(2)
Demonstrates competence in health literacy in the form and manner set by the Department;
(3)
Demonstrates that the practitioner accepts and provides care for patients enrolled in the Maryland Medical Assistance Program and for uninsured patients in the form and manner required by the Department;
(4)
Demonstrates support from the Health Enterprise Zone in which the HEZ practitioner is practicing in the form and manner specified by the Department; and
(5)
Meets any other criteria specified in applicable tax forms by the Department.
C.
Certification for Income Tax Credit.
(1)
To be certified as preliminarily eligible to receive the income tax credit, a Health Enterprise Zone practitioner shall submit an application for preliminary certification to the Department on a form approved by the Department.
(2)
To receive final certification of eligibility to receive the Health Enterprise Zone Income tax credit, a Health Enterprise Zone practitioner shall:
(a)
Have received preliminary certification; and
(b)
Submit an application for final certification to the Department on a form approved by the Department.
(3)
To claim the credit, the HEZ practitioner shall file an amended tax return for the year in which the income was earned and attach a copy of the Department’s certification to the amended income tax return to claim the income tax credit.

Regulation .05 Verification and Audit of Income Tax Credits and Hiring Tax Credits.Copy Citation

A.
The Department may:
(1)
Request from an HEZ practitioner or employer additional information to verify statements in preliminary and final applications for the income tax credit and the hiring tax credit; and
(2)
Use independent verification to verify information reported on a preliminary or final application for an income tax credit or a hiring tax credit.
B.
The Comptroller retains its audit authority under Tax-General Article, Annotated Code of Maryland.

Regulation .06 Hiring Tax Credits.Copy Citation

A.
The hiring tax credit is a refundable credit of $10,000 against the State income tax for hiring for a qualified position in a Health Enterprise Zone by a Health Enterprise Zone employer.
B.
A Health Enterprise Zone employer may be eligible for a hiring tax credit available under Tax-General Article, §10-731, Annotated Code of Maryland, if the Health Enterprise Zone employer:
(1)
Creates one or more qualified positions during any 24-month period;
(2)
Demonstrates support from the Health Enterprise Zone in which the Health Enterprise Zone employer is operating in the form and manner specified by the Department; and
(3)
Meets any other criteria specified in applicable tax forms by the Department.
C.
Certification for Hiring Tax Credit.
(1)
To be certified as preliminarily eligible to receive the hiring tax credit, a Health Enterprise Zone employer shall submit an application for preliminary certification to the Department on a form approved by the Department.
(2)
To receive final certification of eligibility to receive the hiring tax credit, a Health Enterprise Zone employer shall:
(a)
Have received preliminary certification; and
(b)
Submit an application for final certification to the Department on a form approved by the Department.
(3)
To claim the hiring tax credit, the Health Enterprise Zone employer shall:
(a)
Claim the credit on an electronically filed original or amended Maryland income tax return;
(b)
Include a copy of the final certification from the Department with the electronic return as a binary attachment; and
(c)
Meet any other criteria specified in applicable tax forms by the Comptroller.
D.
Conditions on Hiring Tax Credit.
(1)
The hiring tax credit shall be taken over a 24-month period, with 1/2 for the credit amount allowed each year beginning with the first taxable year in which the credit is certified.
(2)
If the qualified position is filled for a period of less than 24 months, the hiring tax credit shall be recaptured as set forth under Tax-General Article, §10-731(d)(2)(iv), Annotated Code of Maryland.