Arizona: Incentives

Quality Jobs

The primary goal of the Quality Jobs tax credit is to encourage business investment and the creation of high-quality employment opportunities in the state. Quality Jobs accomplishes this goal by providing tax credits to employers creating a minimum number of net new quality jobs and making a minimum capital investment in Arizona.

The Quality Jobs tax credit offers up to $9,000 of Arizona income or premium tax credits spread over a three-year period for each net new quality job ($3,000 per year). The program encourages continuous employment; therefore, the tax credit is equal to:

Years of Employment

Tax Credit Amount

First year:

$3,000 per net new qualified employment position created during the taxable year or partial year of employment.

Second year:

$3,000 per qualified employment position, employed for the second full taxable year of continuous employment.

Third year:

$3,000 per qualified employment position, employed for the third full taxable year of continuous employment.

If the allowable tax credit exceeds the income or premium tax liability, any unused amount may be carried forward for up to five consecutive taxable years.

The Quality Jobs tax credit is capped at 10,000 jobs being claimed each year by all participants. To view the amount of available cap, please download the Tax Credit Allocation Table.

Eligible Applicants

Any company making the minimum capital investment in Arizona and creating the minimum net new quality jobs can apply. Eligibility qualifications are different for rural and metro areas and are described in the chart below.

Area Definition

Min. Jobs

Min. Capital

Qualified Job

Metro Area – Counties with populations of 800,000 or more, excluding cities or towns with populations of less than 50,000 

25

$5M

Is a net new full-time and permanent position that pays 100% of median county wage and the company offers to pay 65% of health insurance costs of the employee

Rural Area – Counties with populations of less than 800,000 and cities or towns with populations of less than municipalities of less than 50,000 located within counties with populations of 800,000 or more

5

$1M

Is a net new full-time and permanent position that pays 100% of median county wage and the company offers to pay 65% of health insurance costs of the employee

General Information


Program Guidelines 2013

Program Summary 2013

An overview of noteworthy changes can be downloaded by clicking here.

County Median Wage

For more detailed information please see below or direct questions to the Program Manager.

 

Application Process

Pre-Approval for Tax Credits

A taxpayer must apply for Pre-approval by submitting an electronic Request for Pre-Approval.  To access the current forms, please click here.  Tax year 2011 and 2012 forms are located below.

If the Request for Pre-Approval is qualified, Commerce will issue a written notification of pre-approval to the company that identifies the amount of tax credits being reserved for the taxpayer.

Applying for Tax Credits

A taxpayer must also submit an electronic Application for Quality Jobs Tax Credits to Commerce. To access the current forms, please click here.  Tax year 2011 and 2012 forms are located below.

If the applicant meets all eligibility requirements, Commerce will issue a Tax Credit Allocation Letter to the taxpayer identifying the credit the taxpayer may be able to claim with the Arizona Department of Revenue (Revenue) or the Arizona Department of Insurance (Insurance), as applicable.

2011 – 2012 Application Materials

Program Summary
Program Guidelines
ACA Ruling 12-02 (QJTC)
Application for Quality Jobs Tax Credits
QJTC Form 2

 

Legislative Information

The QJTC program is established under A.R.S. §41-1525.
Income tax credits -A.R.S. §43-1074 or 43-1161
Premium tax credit - A.R.S. §20-224.03
2014 Legislative Update:  House Bill 2272