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Job Growth Incentive Tax Credit

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Job Growth Incentive Tax Credit

Information

The job growth incentive tax credit (JGTC) encourages the growth of high-paying Montana-based jobs. The credit applies to certain industries and offers a tax credit equal to 50% of employer-paid Federal Insurance Contribution Act (FICA) taxes for qualifying new employees. Review below to help determine your eligibility and learn more about the tax credit, or go directly to the application.

Required Wages of Qualifying New Hires

Every year, the required annual wage for a qualifying new hire increases in line with inflation. The new requirement is calculated every year by October. The below table includes the annual wage needed for a hire to meet qualification, by year of hire.

Year of Hire Qualifying New Employee
Minimum Yearly Wage
2022 $50,000
2023 $54,530
2024 $56,150

How Much will the Tax Credit Be?

The amount of tax credit that can be claimed is equal to the 50% of FICA taxes paid on the Montana source wages of qualifying new employees during the tax year.

To calculate:
  1. Identify qualifying new employees
  2. Sum the employer-paid FICA taxes on Montana source wages of these employees
  3. Divide the sum by two

Verify That Your Business Qualifies

  • Has your business grown since 2021?
    • If you are a business in a county with a population over 20,000, your business must have hired at least 10 qualifying new employees. In a county with a population less than 20,000, the required hires is at least 5 qualifying new employees.
    • For your new hires to qualify, they must have:
      • Been hired after January 1, 2022,
      • Increased your total number of employees relative to 2021,
      • Worked at least six months in the year for which you are filing, and
      • Had annual wages/salaries above the required amount when hired. View the wage/salary requirements.
  • The qualifying employees must have been hired towards a Montana-based project that will encourage, promote, and stimulate economic development.
    • Qualifying projects are in the construction, natural resources, mining, agriculture, forestry, manufacturing, transportation, utilities, or outdoor recreation sectors.

Do You Believe You Qualify?

  1. Create account

    Fill out the step-by-step application here: https://ebiz.mt.gov/WSD/.

    You will be asked to provide information about the business applying for the credit, the number of employees of the employer in 2021 (as reported on quarterly UI-5 Unemployment Insurance reporting form) and the tax year in question, the qualifying project, and each qualifying new employee hired.

  2. Submit an Application

Please note that you cannot claim both the apprenticeship tax credit and the job growth tax credit in the same tax year, but please apply for the job growth tax credit so you can determine which credit most benefits your business.

If you have questions about the tax credit program or the application process, please email us at jobgrowthtaxcreditprogram@mt.gov

FAQs - Job Growth Incentive Tax Credit
    • In the 2021 session, the State of Montana established the job growth incentive tax credit to promote the growth of high paying jobs in Montana. Employers who hire enough new workers in high paying jobs may qualify for an annual credit against income taxes imposed under the Federal Insurance Contributions Act (FICA).You can read the tax credit’s law here, and administrative rules here.
    Last Updated 7/24/23
  • The amount of the credit is equal to 50% of the taxes paid on Montana source wages of qualifying new employees under the Federal Insurance Contributions Act (FICA).
  • To apply, create an account and use the electronic application form established by the Montana Department of Labor and Industry found here: https://ebiz.mt.gov/WSD/. You will be asked to provide information about the employer applying for the credit, the total number of employees in 2021 and the tax year you are filing for, the qualifying project, and each qualifying new employee hired.
  • The tax credit can be applied for year-round. However, at any time you can only apply for the period covering the previous calendar year. For example, in 2024 applicants will only be able to apply for the 2023 tax year’s credit. For the department to issue a tax credit by regular filing dates, the employer must apply by January 31 of the year following the tax year for which the certificate is requested.
    Last Updated 7/24/23
  • To qualify for the JGTC, a business must have qualifying net employee growth associated with a qualifying project. The amount of qualifying net employee growth needed depends on the location of the project and whether the business has claimed the tax credit in the past.
    • For a project in a county with population 20,000 or less, an employer claiming for the first time must have qualifying net employee growth of at least 5, and at least 7 for every year after the first.
    • For a project in a county with population above 20,000, an employer claiming for the first time must have qualifying net employee growth of at least 10, and at least 15 for every year after the first.
    Last Updated 7/24/23
  • A qualifying project is a project in Montana that encourages, promotes, and stimulates economic development in the sectors of construction, natural resources, mining, agriculture, forestry, manufacturing, transportation, utilities, or outdoor recreation.
  • Qualifying net employee growth is the number of qualifying new employees hired after 2021 who worked for at least 6 months of the year being applied for.
  • A qualifying employee is an employee who:
    • Was hired after 2021,
    • Was hired with an annual wage above the required amount (see below question for the schedule of wage cutoffs by year) and with all benefits paid to other employees,
    • Was hired towards a qualifying project,
    • Worked at least 6 months in the year being applied for, and
    • Increased the total number of employees employed by the employer relative to the number of employees employed by the employer in 2021.
  • Yes. The qualifying new employees do not need to be hired in the year the credit is being applied for. So long as they worked at least 6 months in the year being applied for, and had a high enough wage in the year they were hired, then they may have been hired in any year after 2021
    Last Updated 7/24/23
  • Every year the yearly wage that a qualifying employee must be paid will increase by the previous year’s June to June inflation factor as defined by 39-11-404(10)(e) MCA. The table below shows the each tax year’s minimum yearly wage for a qualifying employee:
    Year of Hire Qualifying New Employee
    Minimum Yearly Wage
    2022 $50,000
    2023 $54,530
    2024 $56,150
    Last Updated 8/28/23
  • Yes, the credits may be carried over and applied when filing taxes in a future year.
    Last Updated 7/24/23
  • Once you’ve received your Job Growth Incentive Tax Credit Certificate, you need to provide this certificate along with Form JGI with your annual tax filings. You can find the form here.