You've heard of moving incentives: companies offering a signing bonus to lure workers to relocate. Now, state and local governments are getting into the game, offering tax credits or actual cash to lure residents.
If you're considering a move, knowing about these incentives might help tip the scales. Perhaps you're a soon-to-be college graduate and entering the workforce. Or, like me, you might be one of the millions of Americans who have a mobile job.
First, none of the state and local moving incentives is big enough to be the sole reason you move. Rather, if you're considering moving to a certain region, an incentive might help you choose one place over another. In New England, for example, two states offer benefits. Headed to Oklahoma? Tulsa's moving incentive might help you.
Below is a breakdown of what's out there, pros and cons, and how to find out about other factors you should consider.
Alaska: Since 1976, every resident -- kids too -- gets an annual check from the state's Permanent Fund, fueled by oil tax revenue. It's usually between $1,000 and $2,000 per resident.
--Pros: Cash, no strings attached. That's no guarantee it'll last forever, but it has survived several attempts to divert the money to other uses. (Plus, Alaska has no income or sales tax.)
--Cons: Even if you're a cold-weather-loving nature nut, Alaska is an expensive place to live. That's why the Permanent Fund was started, to help offset the cost of living. According to the Tax Foundation's cost of living chart, the real value of $100 is around $92 in Alaska's populated areas.
Vermont's remote worker grant program will award up to $5,000 in moving expenses to new Vermonters. In 2019, the average award was $3,819.
--Pros: The state also supports a program in which local hosts in the business community coordinate a weekend visit with people in your industry, sightsee and even look at real estate. If you do make the move, you'll have a head start on becoming part of the community.
--Cons: The award is first come, first served. During the first nine months, it drew 4,201 applications and just 84 of them got money ($320,000 in total). The legislature has put more money into the program, but demand still far outpaces the supply.
Maine's Educational Opportunity tax credit applies to anyone who received an undergraduate or graduate degree from any accredited college or university in the U.S. in 2016 or later. Prior to that year, the tax break only applies to graduates of Maine's schools.
Generally speaking, you can deduct most if not all of your monthly student loan payments from income you declare on state tax filings. The maximum deduction for 2019 graduates is $367 per month, or $4,404 for the year. Maine's average state and local tax burden is nearly 11%. If you make $50,000 a year, over 10 years, you shave more than $44,000 off your declared income and save nearly $5,000 in taxes.
Some cities offer their own incentives to lure residents. Some examples:
Home building: There's free land, as long as you build a house on it, in Curtis, Neb., which also offers benefits up to $1,000 if you have kids. Other places giving away land to home builders include Marquette, Kan., and New Richland, Minn.'s Homestake subdivision.
Home builders in Harmony, Minn., get a cash rebate of up to $12,000 to cover the cost of construction. Baltimore will give you up to $10,000 if you buy a vacant property and renovate it. Newton, Iowa, is offering up to $10,000 cash for buying a new home there.
A word of caution, though. Incentives often indicate the city or state is having financial problems or losing residents. Do some math. In Curtis, for example, average home values are less than $80,000. Could you ever sell yours? In Baltimore, $10,000 might not go far if you're renovating a fixer-upper.
Ask yourself: After your incentive, what will you own and will its value exceed something you could buy in a more robust city or state at a similar price?
Tax breaks and cash: Hamilton, Ohio, is offering to help repay student loan debt -- up to $10,000 over 30 months -- for recent college graduates who move there. Niagara Falls, N.Y., could reimburse your student loan payments up to nearly $7,000 if you agree to live in specific neighborhoods for two years.
North Platte, Neb., will match any employer signing bonus up to $5,000. Tulsa's remote workers program offers a $10,000 grant, a year membership at a local co-working space and support in finding housing.
To look for incentive programs, check the city's or region's economic development office or local chamber of commerce.
For more resources on moving, including tax rates and local economic health, see my earlier article on working from home. Also look at school performance. And if you have healthcare needs or just don't want to be far from a hospital, look up where the closest regional medical center is. And read the reviews; I recommend Nurse.org.
Last, don't forget your internal needs. Are there co-working spaces? What's the community like? My colleague Dee Gill details how to relocate among people you enjoy in this series on Moving for Happiness.
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