A taxpayer that is an employer in North Dakota is entitled to an income tax credit for costs incurred during the tax year to recruit and hire employees for hard-to-fill employment positions for which the annual salary for the position meets or exceeds the state average wage.
- “Hard-to-fill employment position” means a job that requires the employer to use extraordinary recruitment methods and for which the employer’s recruitment efforts for the specific position have been unsuccessful for six consecutive calendar months.
- “State average wage” means 125% of the state average wage published annually by Job Service North Dakota and which is in effect at the time the employee is hired.
- “Extraordinary recruitment methods” means using all of the following:
- A person with the exclusive business purpose of recruiting employees and for which a fee is charged by the recruiter.
- An advertisement in a professional trade journal, magazine, or other publication, the main emphasis of which is providing information to a particular trade or profession.
- A website, the sole purpose of which is to recruit employees and for which a fee is charged by the website.
- Payment of a signing bonus, moving expenses, or nontypical fringe benefits.
The credit may be claimed in the first tax year beginning after the employee filling the hard-to-fill position has completed their first 12 consecutive months of employment in the hard-to-fill position.
Qualifications
A corporation that is an employer in North Dakota for cost incurred to recruit and hire employees for hard-to-fill employment positions for which the annual salary for the position meets or exceeds the state average wage. Property Tax Clearance Record form is required.
A taxpayer that holds an interest in a passthrough entity that qualifies for this credit may claim its share of the tax credit in proportion to its interest in the entity. The credit must be claimed in the same taxable year in which the taxable year of the passthrough entity ends.
Credit Amounts
A credit may be claimed for 5% of the salary paid to an employee in a qualified hard-to-fill position for the first 12 consecutive months of that employee’s employment in that position.
Application Process
Not Applicable.
How to Claim
If you're filing as a/an: | Claim the credit on: |
| Individual or Sole Proprietor | Schedule ND-1TC, Tax Credits |
| C Corporation | Form 40, Corporation Income Tax Return Schedule TC |
| S Corporation | Form 60, S Corporation Income Tax Return Schedule K |
| Partnership | Form 58, Partnership Income Tax Return Schedule K |
| Fiduciary | Form 38, Fiduciary Income Tax Return Schedule 38-TC |