The primary goal of the Quality Jobs Tax Credit program is to encourage business investment and the creation of high-quality employment opportunities in the state. The program 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 Job program offers up to $9,000 of Arizona income or premium tax credits spread over a three-year period for each net new quality job. 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 Program is capped at 10,000 jobs being claimed each year by all participants; whereas a taxpayer is limited to a maximum of 400 new jobs per year.
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 a population of 800,000 or more, excluding municipalities of 50,000 or less | 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 a population of less than 800,000 and municipalities of less than 50,000 within counties of more than 800,000 | 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 Summary
- Program Guidelines
- ACA Ruling 12-02 (QJTC)
- County Median Wage
- For more detailed information please see below or direct questions to the Program Manager.
Application Process
Pre-Approval for Tax Credits (Optional)
- A taxpayer may apply for pre-approval by submitting an electronic Request for Pre-Approval. To apply electronically for program incentives, click here.
- 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
- To apply for tax credits a taxpayer must submit an Application for Quality Jobs Tax Credits and the QJTC Form 2 to Commerce. To apply electronically for program incentives, click here.
- 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.
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
