These regulations implement Education Article, §21-309, Annotated Code of Maryland, which establishes a tax credit for businesses which employ individuals with disabilities. In this chapter, the following words have the meanings indicated. Terms Defined. “Business entity” means: A person conducting or operating a trade or business in Maryland; or An organization operating in Maryland that is exempt from taxation under §501(c)(3) or (4) of the Internal Revenue Code. “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: State-regulated child care expenses that are incurred by a business entity to enable a qualified employee with a disability to be gainfully employed; or Transportation expenses that are incurred by a business entity to enable a qualified employee with a disability to travel to and from work. Qualified Employee With a Disability. “Qualified employee with a disability” means an individual who: Meets the definition of an individual with a disability as defined by the Americans with Disabilities Act; Has a disability that presently constitutes an impediment to obtaining or maintaining employment or to transitioning from school to work; Is ready for employment; and Has been determined by the Division or the Maryland Department of Labor, in consultation with the Division, as having met the criteria of a qualified employee with a disability established under this section. “Qualified employee with a disability” does not mean an employee who has been found by the Division as having the particular skills necessary for a particular job. “Qualified employee with a disability” includes an individual who has been certified by the Maryland Department of Labor in consultation with the United States Department of Veterans Affairs, as having been discharged or released from active duty in the armed forces of the United States for a service-connected disability. “Qualified employee with a disability” includes any individual meeting the definition in §B(6)(a) of this regulation, regardless of whether the individual receives services from the Division. “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. Issuance of Vouchers—Potential Eligibility for Tax Credit. 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. Applicant Information. The Division, the Department of Veterans Affairs, or the deemed agency shall complete the necessary applicant characteristics form and submit the original copy to the Maryland Department of Labor. Certification by the Maryland Department of Labor. 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. Wages. 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. Child Care or Transportation Expenses. 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. The calculation and carryover of the credit is governed by regulations promulgated by the Comptroller, the Department of Assessments and Taxation, and the Insurance Commissioner. The Maryland disability employment tax credit shall be applicable to all taxable years beginning after December 31, 1996. An employer may claim the credit only for employees hired on or after October 1, 1997. A business entity may not claim the credit for an 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. A business entity may not claim the credit until it has received a certificate in accordance with Regulation .03C of this chapter. A business entity may claim the credit as follows even if an employee's employment lasts less than 1 year: 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. The same tax credit may not be applied more than once against different taxes by the same taxpayer. Education Article, §21-309, Annotated Code of Maryland Effective date: February 23, 1998 (25:4 Md. R. 244) Regulation .02 amended effective October 1, 2001 (28:19 Md. R. 1687) Regulation .03 amended effective October 1, 2001 (28:19 Md. R. 1687) Regulation .03A, C amended effective August 7, 2000 (27:15 Md. R. 1402) Regulation .04 amended effective October 1, 2001 (28:19 Md. R. 1687) Regulation .06 amended effective October 1, 2001 (28:19 Md. R. 1687); January 21, 2013 (40:1 Md. R. 21) Regulation .06A, B amended effective August 7, 2000 (27:15 Md. R. 1402); December 6, 2007 (34:24 Md. R. 2158); January 12, 2009 (36:1 Md. R. 23); November 30, 2009 (36:24 Md. R. 1859)