Chapter 02. Maryland Disability Employment Tax Credit

“Business entity” means:

“Deemed agency” means a public organization with whom the Division and the Maryland Department of Labor, have developed a memorandum of understanding regarding identification of qualified employees with disabilities who may benefit from the tax credit.

“Division” means the Division of Rehabilitation Services of the Maryland State Department of Education.

“Maryland Department of Labor” means the State agency responsible for administration of the Maryland disability employment tax credit.

“Qualified child care or transportation expenses” means:

Qualified Employee With a Disability.

“Ready for employment” means a person who is willing to accept an offer of employment.

“Wages” means wages that are paid by a business entity to an employee for services performed in a trade or business of the employer, within the meaning of §51(c)(1), (2), and (3) of the Internal Revenue Code with regard to §51(c)(4) of the Internal Revenue Code.

Individuals who are served by the Division, the Department of Veterans Affairs, or deemed agencies shall apply to those agencies for a tax credit voucher. The Division, the Department of Veterans Affairs, or the deemed agency shall issue a voucher to individuals meeting the definition of qualified employee with a disability under Regulation .02B of this chapter.

Individuals not served by the Division, the Department of Veterans Affairs, or deemed agencies shall apply to a local Division of Rehabilitation Services office and provide supporting documentation that they meet the definition of individual with a disability as defined under Regulation .02B(6) of this chapter. The Division shall issue a voucher to individuals meeting the definition of qualified employee with a disability.

The individual may take the voucher on interviews for employment and present it to the potential employer.

Upon hiring a person presenting a voucher, the employer shall complete the employer's portion of the voucher and return it to the Maryland Department of Labor.

The Maryland Department of Labor shall review the applicant information and information provided on the voucher by the employer. If the Maryland Department of Labor approves the application material and information, the Department shall return a certificate of eligibility for the Maryland disability employment tax credit to the employer.

The employer shall keep the certificate in its files as justification for including the tax credit on its tax return.

For individuals hired before July 1, 2000, for the first and second years of employment of a qualified employee with a disability, the credit is 20 percent of up to the first $6,000 of wages paid to that employee.

For individuals hired on or after July 1, 2000, the credit is 30 percent of up to the first $6,000 of wages paid to the qualified employee with a disability for the first year of employment. For the second year of employment, the credit is 20 percent of up to the first $6,000 of wages paid to the qualified employee with a disability.

For the first year of employment of a qualified employee with a disability, the credit is up to $600 of the child care or transportation expenses paid for that employee.

For the second year of employment of a qualified employee with a disability, the credit is up to $500 of the child care or transportation expenses for that employee.

Who is hired to replace a laid-off employee or to replace an employee who is on strike; or

For whom the business entity simultaneously receives federal or State employment training benefits.

The business entity may claim a tax credit of 20 percent of up to the first $6,000 of wages paid to the employee in the course of employment if the employee voluntarily terminates employment with the employer, if employment began prior to July 1, 2000;

If employment began on or after July 1, 2000, the business entity may claim a tax credit of 30 percent of up to the first $6,000 of wages paid to the employee in the course of employment if the employee voluntarily terminates employment with the employer.

The business entity may claim a tax credit in proportion to the amount of time worked if the employee works less than a full year because of an inability to continue employment due to a further disability or death, or if the employee is terminated for cause.