Health Enterprise Zone

Tax Credit Overview

Christina Shaklee, MA

Public Health Associate

Maryland Department of Health and Mental Hygiene

September 11, 2015

HEZ Purpose

The purpose of establishing Health Enterprise Zones is to target State resources to reduce health disparities, improve health outcomes, and reduce health costs and hospital admissions and readmissions in specific areas of the State.** Maryland Annotated Code, Miscellaneous Health Professions, Subtitle 14: Health Enterprise Zones, §20-1401 to §20-1407

Purpose of Incentives

Tax credits and loan repayment assistance are some of the incentives and resources provided in the state’s Health Enterprise Zones (HEZs) Initiative to help attract new practitioners to underserved areas.  HEZs provide access to a range of incentives, benefits, and resources to address persistent health disparities in our state.

HEZ Incentives: Tax Credits

HEALTH CARE PRACTITIONER PERSONAL INCOME TAX CREDIT:

As of April 28, 2014, eligible health care providers may apply for a tax

credit in an amount equal to 100% of the amount of State income tax.

EMPLOYER HIRING TAX CREDIT:

Eligible employers participating in the HEZ initiative that hire health care

practitioners, community health workers, or interpreters may receive

$5,000 per year over a two-year period per employee.

Please Note: Tax credits are subject to the availability of funds for tax credits in the Health Enterprise Zone's

budget, and will be awarded on a first-come, first-served basis, as determined by DHMH in its sole discretion.

Health Care Practitioner Income Tax Credit

Qualifications:• Be a health care practitioner who is licensed or certified under the health occupations article and who

provides either: (1) primary care, including obstetrics, gynecological services, pediatric services, or geriatric services; (2) behavioral health services, including mental health or alcohol and

substance abuse services; or (3) dental services.

• Accept Medicaid recipients and uninsured patients as demonstrated by attestation; and,• Demonstrate cultural, linguistic, and health literacy competency as shown on application.• Obtain a Letter of Support from the Health Enterprise Zone.

Employer Hiring Tax Credit

• Enables employers to receive $5,000 per year over a two-year period per qualified employee. 

• Employers that hire health care practitioners, community health workers, or interpreters and receive a letter of support from the HEZ where they practice are eligible to apply. 

• Qualified employees must be working in the HEZ for 12 months before the employer can apply for the tax credit.

Employer Hiring Tax CreditA Qualifying HEZ Employer that has hired a qualified employee(s) may

apply for this tax credit.

    (a) The HEZ Employer must provide one or more of the following services in HEZ:         (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.

    (b) A Maryland HEZ Employer includes a corporation, business trust, partnership, limited liability company, association, or any other legal or commercial entity that a health care practitioner owns in whole or in part.

Employer Hiring Tax Credit

Qualified EmployeeThe “Qualified Employee” is a HEZ practitioner, community health worker, or interpreter who:

- Provides direct support to a HEZ practitioner; and

- Expands access to services in a HEZ.

Qualified PositionThe “Qualified Position” a qualified employee position that:

- Pays at least 150% of the federal minimum wage;

- Is a full-time and of indefinite duration;

- Is located in a Health Enterprise Zone;

- Is newly created, as a result of the establishment or expansion of services in a Health Enterprise Zone; and

- Is filled for a period no less than 12 months

Tax Credit- Letter of Support

• The HEZ is responsible for providing a Letter of Support for tax credit applicants.

• DHMH will verify all other eligibility requirements when applications are received.

Letter of Support Criteria for All Zones

Tax Credit Applicant Eligibility:

- Provides services in the HEZ;

- Is “in accordance with” the proposal approved by the Secretary (i.e. works with the HEZ to meet goals and objectives), and

- Has established or expanded health care services in the Zone.

Considerations/Requirements

• HEZ can decide if they want to provide LOS on a rolling basis or require an initial application once or twice during the tax year

• LOS Criteria must be consistent across ALL Zones.

• Providers/Entities MUST meet all statutory requirements (cultural competency, accept Medicaid/uninsured, and provide relevant services)

• Must be located in the HEZ

• Tax credits are subject to the availability of funds for tax credits in the Health Enterprise Zone's budget, and will be awarded on a first-come, first-served basis, as determined by DHMH in its sole discretion.

Questions and Suggestions