August 19, 2024 Filing he Employer Security Clearance Costs (ESCC) Tax Credit application can provide income tax credits for expenses related to federal security clearance costs, construction of Sensitive Compartmented Information Facilities (SCIFs) and first-year leasing costs for small businesses doing security-based contract work. Table of Contents Benefits to Note: • A business may qualify for an income tax credit up to $200,000 per taxable year for qualified security clearance administrative expenses. • A business may also claim a credit against its Maryland income tax for costs related to the construction or renovation of a SCIF located in Maryland. • A qualified small business may also claim a credit against its Maryland income tax up to $200,000 for costs for rental payments during the first year of a rental agreement for leasing spaces to perform security-based contracting work. The ESCC tax credit application must be submitted by September 15th following the year in which the eligible expenses and costs were incurred. Further details about the above benefits, eligibility and how to apply can be found on the Maryland’s Department of Commerce’s website: click here. How KatzAbosch Can Help We encourage government contractors with security costs in Maryland to take advantage of this unique tax credit. By doing so, you could invest these savings into innovation and new talent to help grow your businesses in 2024 and beyond. Please contact your KatzAbosch representative or contact us to discuss further. Frequently Asked Questions What is the ESCC tax credit? The ESCC (Employee Security and Compensation Credit) is a tax credit designed to support businesses by providing financial relief based on specific employee compensation criteria. Who is eligible for the ESCC tax credit? Businesses that meet certain employee security and compensation requirements may be eligible for the ESCC tax credit. Eligibility criteria often include factors like the number of employees, compensation levels, and specific industry qualifications. What documents are needed for the ESCC tax credit application? Required documents for the ESCC tax credit application may include payroll records, employee compensation statements, and other financial documents demonstrating eligibility for the credit. What happens if a business misses the ESCC tax credit application deadline? If a business misses the ESCC tax credit application deadline, it may not be eligible to claim the credit for that tax year. Businesses should submit their applications before the deadline to avoid missing out on potential savings.
