DC Tech Incentives Overview
The following programs are available to Qualified High Technology Companies (QHTC). QHTC’s must be located in the District of Columbia, have at least two employees and derive most of their income from qualifying high tech activities.
Corporate Income Tax Abatement/Reduction: 5 Year Exemption from Corporate Tax. Following the 5 Year Tax Exemption, Reduction of Corporate Tax Rate to 6% (Equal to VA Corp. Tax Rate)
Hiring Credit: Corporate Tax Credit up to $5,000 per employee per year for 2 years. Employees must be full time. Tax Credit is equal to 10% of annual salary.
Relocation Credits: Corporate Tax Credits for any employee moving their residence to the DC Metro Area or to the District of Columbia. Credits/savings passed on to employees are made at the discretion of the corporation. The corporation may share these savings from tax credits with its employees, but there is no obligation to do so. There are 2 levels of tax credits for relocation:
• $5,000 Corporate Tax Credit per employee moving their residence to the DC Metro Area. For example, an employee moving from Herndon, VA to Arlington, VA to ease their commute into DC. Total annual tax credit limit of $250,000.
• $7,500 Corporate Tax Credit per employee moving their residence into DC. Total annual tax credit limit of $1,000,000.
10 Year Exemption from DC Personal Property Tax: Covers all property (FF&E) owned by the corporation. Depreciated value of the corporation’s personal property after 10 years should be close to $0.
Sales Tax Exemption: Includes all computer hardware and software purchased in DC.
Real Estate Tax Freeze:
• Owned Property – 5 Year Freeze on the assessed value
• Leased Property, where the corporation occupies at least 50% of the building and improvements to the premises are made – 5 Year Freeze on the assessed value
Training Credit Programs:
• Corporate Tax Credits for hiring unemployed veterans of up to $20,000 per hire (linked to Work Opportunity Tax Credit Program). Tax credit amounts based upon the value of training. In-house corporate training programs must be pre-qualified by DC Employment Services.
• Federal Tax Credits ranging from $2,400 to $9,600 are also available for hiring unemployed veterans. Tax credit amounts depend upon the status of the veterans hired.
• Reimbursement for on the job training for unemployed DC residents. 50% of trainee’s wage, up to $8,000 max.
Enterprise Zone Program: Federal Tax Credit of up to $3,000 per DC resident retained (based on 20% of wages) for corporations located within an Enterprise Zone. Enterprise Zone tax credits are good for the life of the program.
Retroactive Benefits: These credits may be retroactively applied for by amending tax returns up to 3 years in arrears. Sales taxes may be retroactively rebated through the retailers. We are confirming the process of applying for retroactive credits.
Note: There is a 10 Year carry-forward of all tax credits