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Apply for the PEAK Credit if your business will create new jobs in Kansas

June 7, 2021

PEAK stands for Promoting Employment Across Kansas!

Has your business been located, relocated or expanded in Kansas, resulting in the creation of new jobs? If so, you may be eligible for the Promoting Employment Across Kansas (PEAK) Credit.

PEAK is a business incentive where eligible companies may either retain or be refunded 95% of the payroll withholding tax of qualified employees for new jobs created in Kansas.

  • A qualified employee is an employee who is paid at or above the county’s median wage rate, as mentioned below in the general eligibility requirements. Qualified employees must be hired after the PEAK application process has begun.

Basic projects that create at least 10 new jobs in metropolitan areas or at least 5 new jobs in non-metropolitan areas within 2 years may be eligible for up to 7 years of payroll tax withholding savings.

Larger, higher impact projects that create at least 100 new jobs within 2 years may be eligible for up to 10 years of payroll tax withholding savings.

What companies can qualify?
• Existing Kansas businesses
• New startup businesses
• Out-of-state businesses
• International businesses
• Not-for-profit headquarter locations

What are the general eligibility requirements?

  • Businesses interested in applying must first submit a business incentive questionnaire to be approved for benefits by the Kansas Secretary of Commerce.
  • The company must be a for-profit entity with a qualifying NAICS code or a not-for-profit entity with headquarters in Kansas. Whether or not your company’s NAICS code qualifies for the credit will be determined with the business incentive questionnaire.
  • New jobs in Kansas must be created resulting from locating, relocating or expanding the business.
  • The minimum employment requirements must be met (at least 10 new metro jobs or 5 new non-metro jobs, as mentioned above).
  • Wages paid to employees must meet or exceed the county’s median wage. Click here for Median Wages
  • Adequate health care coverage for full-time employees must be provided. At least 50% of the health insurance premiums must also be paid.
  • The owner must materially participate in a trade or business activity of the company. A taxpayer materially participates if they work on a regular, continuous and substantial basis. Internal Revenue Service Regulation 1.469-5T(a) provides a more detailed description of what it means for a taxpayer to “materially participate”.

Credit Limitations
The credit is limited to the amount of the taxpayer’s Kansas tax liability.

What is the application process?
For this particular job creation incentive, there are several steps to take that will ensure a business qualifies for the credit before the formal application is filled out.

  • First, anyone interested in applying for the PEAK credit should contact the PEAK Program Manager with the Kansas Department of Commerce. They will provide the Business Incentive Questionnaire. Click here for the Link
  • If the PEAK Program Manager believes approval for the credit is likely, they will create a formal proposal for the business.
  • Following the formal proposal, the formal application should be filled out by the business. This includes the $750 online application fee.
  • The business must now await approval for the PEAK credit while the Department of Commerce reviews the application along with Quarterly Wage Reports they will receive from the Kansas Department of Labor.

As you can see, the process to apply for the PEAK credit can be rather lengthy. If you have additional questions regarding the credit and your eligibility, please contact us as we can help you through it.