The Job Creation Tax Credit rewards businesses that increase the number of jobs available in the City.
A business firm can apply this credit to its Business Income and Receipts Tax (BIRT) liability if it either:
- Creates 25 new jobs; or
- Increases its number of employees by at least 20% within five years of the designated start date.
The start date is the day that the business may begin to create the new jobs. Any jobs that were created before the designated start date will not be eligible for the credit.
Program participants must commit to maintaining business operations in the City of Philadelphia for five years.
The credit amount for jobs created in 2012, 2013, 2014, or 2016 and thereafter is 2% of annual wages paid for each new job or $5,000 per new job created, whichever is higher, subject to the maximum amount specified in the commitment agreement.
Applying for the credit
Interested businesses must submit an application to the Department of Revenue (Revenue). Once a business is accepted into the program, the business and the City execute a commitment agreement that sets forth the designated start date and the number of jobs to be created.
Receiving the credit
A business has up to five years to create the agreed-upon number of jobs. Upon creating the jobs, the business asks Revenue to certify the number of jobs created and wages paid. Revenue will conduct a payroll review of the company’s records to compare the number of jobs when the firm entered the program with the number of jobs at the time of the review. If Revenue is satisfied that the appropriate number of jobs have been created, it will issue a tax credit certificate stating the amount of credit that the business firm is entitled to.
A business is required to refund the total amount of the credit or credits issued if it fails to:
- Maintain existing business operations for five years from the date that the tax credit certificate is first submitted to Revenue; or
- Create the agreed-upon number of jobs.
In either of these situations, the business must fully repay the credit(s) unless the Department of Revenue grants a waiver.