Amy Thorpe
Economic Development Administrator

Nancy Edmonds Hanson

Amy Thorpe wants to give Moorhead businesses tax credits in 2023.
The city’s economic development program manager is looking for companies that are eligible for state income tax credits based on what they pay for workers compensation insurance. If they meet the qualifications set under the Border Cities Enterprise Zone program, one quarter – 25% – of those payments can be refunded to them, up to a maximum of $30,000 per year.
More than 100 businesses received in excess of $400,000 under the program in 2022, she says. “Many have been applying for these credits for many, many years,” she notes. “But I’m looking for newer businesses and others that might not know about the program, especially in the industries that pay the most in workers compensation premiums.
Workers compensation tax credits account for the lion’s share of the $525,000 Moorhead receives from the state. It’s one of five cities along the North Dakota-Minnesota border where businesses are eligible, also including East Grand Forks, Dilworth, Breckenridge and Ortonville.

The tax credits are intended to even out the cost of doing business on the Minnesota bank of the Red River. “North Dakota runs its own program for workers compensation, so it’s less expensive,” Thorpe explains. “We do not. In Minnesota, each business purchases coverage from insurance agents. Our businesses pay more for those policies. The rebates are meant to reduce the disparity.”
The rebates are fully refundable by the state. If they amount to more than the business owes in taxes, Thorpe says, owners receive a check for the remaining balance.
To be eligible for the program, businesses must be incorporated and located within the Moorhead city limits. “The expense has to be incurred here,” she notes. They must have employees other than the owner, since those are the companies required to provide workers comp coverage. And they have to file and pay income taxes, since the credits are applied directly to their tax bill.
While all businesses are required to insure their employees who may become ill or injured on the job, the cost is generally greatest in industries where workers are more at risk. Thorpe cites trucking, auto-related services, manufacturing and construction as those in which rates are most burdensome. The credit applies to those working under traditional employment rather than 1099s (contract or freelance workers, for whom the employer is not required to pay benefits).
More than 200 Moorhead businesses have received flyers summarizing the program in recent weeks. Thorpe is concerned, though, that not everyone who’s eligible may be aware of the rebates. “It’s hard to get to every small business. We may not know about them,” she says, “since they might not have needed anything from the city that brought them to our attention.” The state provides a list with more than 800 names, she adds, but it’s often outdated and includes many sole operators who needn’t buy the insurance and thus aren’t involved in the program.
Applying for the 2023 credits, she says, is easier than ever. What was once a lengthy pen-and-paper form has been replaced this year by an online registration system developed by the city’s IT staff. The state Department of Employment and Economic Development reviews applications as they’re uploaded for compliance with the program. Then the business will receive the EZC credit form via a final email.
To submit an application, go to https://aps.cityofmoorhead.com/WorkersCompTaxCredit. More information is available from Thorpe at 218.299.5441 or economicdevelopment@moorheadmn.gov.