DC Tech Incentives
Are you a company that delivers technology products and services? Qualified High Technology Companies (QHTC) can claim tax benefits to support their growth in the District. These benefits include a reduced capital gains tax rate and lowered costs to hire and train workers.
A Qualified High Technology Company (QHTC) is a for-profit company which:
- Leases or owns an office in the District of Columbia.
- Derives at least 51% of its gross revenues earned in the District from one or more permitted high technology activities. Examples include website design, software development, and data processing.
- Has 10 or more qualified employees in the District (employed for at least 35 hours per week in any of the permitted activities).
- Is registered with the DC government as a business in DC.
- Is not located in the DC Ballpark TIF Area. Enter your address on the map at incentives.dc.gov to ensure your location qualifies for QHTC Incentives.
QHTC benefits include:
- Reduced capital gains tax rate: only 3% for qualifying investments in QHTCs (see details below)
- New hire wage tax credit: up to $15,000 annually (for 24 months) for each qualified disadvantaged* employee
º Up to $3,000 annually (for 24 months) for all other qualified employees**
- New hire retraining tax credit: up to $10,000 for each qualified disadvantaged employee
- 5-year freeze on real property taxes for office improvements
- 10-year tax exemption from the date of acquisition on personal property used for operating your business (available through June 30, 2021)
Capital Gains Tax Reduction:
For the tax year beginning after December 31, 2018 and ending before January 1, 2020, and for tax years beginning after December 31, 2024, the tax on a capital gain from the sale or exchange of an investment in a QHTC shall be at the rate of 3% if:
- The investment was made after March 11, 2015;
- The investment was held by the investor for at least 24 continuous months;
- At the time of the investment, the stock of the QHTC was not publicly traded; and
- The investment is in common or preferred stock of the QHTC.
*A qualified disadvantaged employee is defined as:
- A DC resident and
- A recipient of Temporary Assistance for Needy Families (TANF); or
- A recipient of TANF in the period immediately preceding employment; or
- A person released from incarceration within twenty-four months before the date of employment by a QHTC; or
- An employee hired, or relocated to DC, after December 31, 2000, and for whom a QHTC is eligible to claim the Welfare to Work Tax Credit or the Work Opportunity Tax Credit under IRC sec. 51.
**A qualified employee means a person who is employed in the District by a Qualified High Technology Company.
How to Claim QHTC Benefits
Existing and new taxpayers seeking QHTC-related benefits will be required to complete an online application annually to fulfill the self-certification requirement via MyTax.DC.gov. The annual self-certification process will replace the existing requirement of filing individual QHTC certifications with tax returns.
- Email [email protected]
- Call OTR Customer Service Center at (202) 727-4829