The Missouri Works Program is a state employment incentive that provides a benefit for the creation and retention of new, quality jobs by targeted business projects. This is a cash benefit, as opposed to an income tax credit.

CTI recently helped a manufacturing business capture a cash benefit from the Missouri Work Program. The manufacturer had approximately 1,500 total employees before their expansion project to build a new facility. Their expansion efforts resulted in approximately 900 new jobs.

The total benefit CTI’s client received from the Missouri Works Program was just shy of $2 million, which the manufacturer is set to receive over the next six years.

A “new job” is defined as the hiring of a full-time employee of the company who is working at the project facility. The employee must average 35 or more hours per week each year, and the company must offer and pay at least 50% of the employee’s health insurance.

There are two significant tax benefits of the Missouri Works Program:

• Retention of the state withholding tax of the newly created jobs

• State tax credits, which are refundable, transferable and/or saleable

There is no annual limit on the retained withholding taxes. Tax credits issued for the entire Missouri Works Program are as follows: $106 million for 2014, $111 million for 2015 and $116 million for 2016 and onward.

The Missouri Works Program includes five categories for participating businesses, which have varying requirements for the minimum amount of new jobs, capital investment, average wage and automatic benefits.

There are four notes attached to the Missouri Works Program’s eligibility requirements and benefit levels:

• The project facility must be located in an “enhanced” enterprise zone.

• The project facility must be located in a rural county, which does not include Boone, Buchanan, Clay Greene, Jackson, St. Charles or St. Louis City and County.

• The benefit period is five years, or six years for existing Missouri companies (those that have been operational in Missouri for at least 10 years).

• Companies may be offered additional discretionary tax incentives, up to a maximum of 9% of new payroll, if certain criteria are met.

Pertaining to the last note above, Statewide Works or Mega Works projects may be considered for other discretionary benefits, based on a number of criteria. These specifications take into consideration an enterprise zone’s level of economic distress, as well as the percentage of local incentives committed to the project.

Missouri Works Program Reporting Requirements

Annually, a business must submit a report documenting the new jobs created and the resulting total payroll. The report must also confirm that the business meets health insurance requirements for new jobs. Additionally, the Tax Credit Accountability Act Reporting Form must be submitted to the Department Of Revenue by June 30th each year the company receives tax credits, and for the three years following the issuance of the tax credits.

Navigating The Complexities Of This State Employment Incentive

The Missouri Works Program is a state employment incentive offering businesses an opportunity for substantial tax savings. While this blog post has only touched upon the high-level features of the program, there are numerous details concerning eligibility, benefit criteria, the process of applying for benefits, annual reporting requirements, penalty revisions and restrictions.

That’s why it is recommended you contact an outsourced tax consultant who is well-versed in Missouri state employment incentives. A tax expert easily guides you through the program details, creating a well-devised roadmap for capturing tax incentives, from meeting eligibility requirements to accurately fulfilling reporting requirements.

Ready to learn if your Missouri-based business is eligible for the Missouri Works Program and other state employment incentives? Schedule your 30-minute, no-cost consultation with a tax expert at CTI today.