02.04.15 |
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Philadelphia Offers Job Creation Tax Credit

PhiladelphiaSimilar to the Pennsylvania Job Creation Tax Credit, the city of Philadelphia established its own credit to help spur job creation, retention and/or
capital investment within the city limits.

Who can claim the credit?

Eligibility for the Philadelphia Job Creation Tax Credit (local JCTC) requires the same level of job creation as the state’s credit – 25 net new employment positions or an increase in a company’s existing headcount by 20 percent – but the local JCTC allows for the job growth to occur over a period of five years (as opposed to three for the state’s credit)1.

How is the total credit amount determined?

The value of the local JCTC is 2 percent of annual gross wages paid to new employees or $5,000 per net new job, whichever is greater. The city’s Department of Revenue (DOR) has the discretion to offer a more lucrative incentive depending on the level of job creation, wages and capital investment1.

 

How do businesses claim the credit?

Prior to the start of hiring activities, companies must file an application with the DOR. Following its review, the DOR will provide companies with a commitment agreement, which formalizes job creation commitments and the tax credit value. As with the state’s JCTC, a company’s failure to comply with the requisite performance commitments may result in recapture of the credit.

Effective as of October 29, 2014, and for employment positions created in 2015, the local JCTC allows for a credit term of five years. To qualify for the five-year term, jobs must pay either 150 percent of the federal minimum wage or $12 multiplied by the Consumer Price Index (CPI) multiplier, whichever is greater2.

Learn more about how ADP can help businesses identify and capture tax credits and incentives for which they may be eligible.

Learn More About ADP SmartCompliance® Tax Credits

  1. City of Philadelphia – Job Creation Tax Credit – http://www.sbnphiladelphia.org/images/uploads/files/Preview_of_JCTC_pdf.pdf
  2. City of Philadelphia – Bill No. 140641 – http://hr.cch.com/PayNetnews/CertifiedCopy14064100.pdf

 


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