EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0093*
SENATE BILL 93
O3, Q3, Q7 2lr1058
(PRE–FILED)
By: Senator Kramer
Requested: October 29, 2021
Introduced and read first time: January 12, 2022
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
Tax Credits – Employment of Individuals With Disabilities 2
FOR the purpose of altering the amount of certain credits against the State income tax, 3
insurance premium tax, financial institution franchise tax, and public service 4
company franchise tax for certain wages paid and certain child care or transportation 5
expenses incurred by certain business entities with respect to certain employees with 6
disabilities; and generally relating to tax credits for wages paid and child care or 7
transportation expenses incurred by a business entity with respect to the 8
employment of individuals with disabilities. 9
BY repealing and reenacting, with amendments, 10
Article – Education 11
Section 21–309 12
Annotated Code of Maryland 13
(2018 Replacement Volume and 2021 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Education 17
21–309. 18
(a) (1) In this section the following words have the meanings indicated. 19
(2) “Business entity” means: 20
(i) A person conducting or operating a trade or business in 21
Maryland; or 22
2 SENATE BILL 93
(ii) An organization operating in Maryland that is exempt from 1
taxation under § 501(c)(3) or (4) of the Internal Revenue Code. 2
(3) “Division” means the Division of Rehabilitation Services of the 3
Maryland State Department of Education. 4
(4) “Qualified child care or transportation expenses” means: 5
(i) State regulated child care expenses that are incurred by a 6
business entity to enable a qualified employee with a disability to be gainfully employed; 7
or 8
(ii) Transportation expenses that are incurred by a business entity 9
to enable a qualified employee with a disability to travel to and from work. 10
(5) (i) “Qualified employee with a disability” means an individual who: 11
1. Meets the definition of an individual with a disability as 12
defined by the Americans with Disabilities Act; 13
2. Has a disability that presently constitutes an impediment 14
to obtaining or maintaining employment or to transitioning from school to work; 15
3. Is ready for employment; and 16
4. Has been determined by the Division or the Maryland 17
Department of Labor, in consultation with the Division, as having met the criteria of a 18
qualified employee with a disability established under this section. 19
(ii) “Qualified employee with a disability” includes: 20
1. An individual who has been determined by the Maryland 21
Department of Labor, in consultation with the United States Veterans Administration, as 22
having been discharged or released from active duty in the armed forces of the United 23
States for a service–connected disability; and 24
2. Any other individual meeting the definition of 25
subparagraph (i) of this paragraph, whether or not the individual receives services from 26
the Division. 27
(6) “Wages” means wages, within the meaning of § 51(c)(1), (2), and (3) of 28
the Internal Revenue Code without regard to § 51(c)(4) of the Internal Revenue Code that 29
are paid by a business entity to an employee for services performed in a trade or business 30
of the employer. 31
(b) (1) Except as provided in subsection (e) of this section, a business entity 32
may claim a tax credit in the amounts determined under subsections (c) and (d) of this 33 SENATE BILL 93 3
section for the wages and qualified child care or transportation expenses with respect to a 1
qualified employee with a disability that are paid in the taxable year for which the business 2
entity claims the credit. 3
(2) The same tax credit cannot be applied more than once against different 4
taxes by the same taxpayer. 5
(c) For each taxable year, for the wages paid to each qualified employee with a 6
disability, a credit is allowed in an amount equal to 30% of up to the first [$9,000] $15,000 7
of the wages paid to the qualified employee with a disability during each of the first 2 years 8
of employment. 9
(d) For each taxable year, for child care provided or paid for by a business entity 10
for the children of a qualified employee with a disability, or transportation expenses that 11
are incurred by a business entity to enable a qualified employee with a disability to travel 12
to and from work, a credit is allowed in an amount equal to up to [$900] $1,500 of the 13
qualified child care or transportation expenses incurred for each qualified employee with a 14
disability during each of the first 2 years of employment. 15
(e) (1) A business entity may not claim the credit under this section for an 16
employee: 17
(i) Who is hired to replace a laid–off employee or to replace an 18
employee who is on strike; or 19
(ii) For whom the business entity simultaneously receives federal or 20
State employment training benefits. 21
(2) A business entity may not claim the credit under this section until it 22
has notified the Division that a qualified employee with a disability has been hired. 23
(3) A business entity may claim a credit in the amount provided in 24
paragraph (4) of this subsection for an employee whose employment lasts less than 1 year 25
if the employee: 26
(i) Voluntarily terminates employment with the employer; 27
(ii) Is unable to continue employment due to a further disability or 28
death; or 29
(iii) Is terminated for cause. 30
(4) (i) If a business entity is entitled to a tax credit for an employee who 31
is employed for less than 1 year because the employee voluntarily terminates employment 32
with the employer to take another job, the business entity may claim a tax credit of 30% of 33
up to the first [$9,000] $15,000 of the wages paid to the employee during the course of 34
employment. 35 4 SENATE BILL 93
(ii) If a business entity is entitled to a tax credit for an employee who 1
is employed for less than 1 year for a reason other than that described in subparagraph (i) 2
of this paragraph, the amount of the credit shall be reduced by the proportion of a year that 3
the employee did not work. 4
(f) If the credit allowed under this section in any taxable year exceeds the total 5
tax otherwise payable by the business entity for that taxable year, a business entity may 6
apply the excess as a credit for succeeding taxable years until the earlier of: 7
(1) The full amount of the excess is used; or 8
(2) The expiration of the 5th taxable year after the taxable year in which 9
the wages or qualified child care or transportation expenses for which the credit is claimed 10
are paid. 11
(g) If a credit is claimed under this section, the claimant must make the addition 12
required in § 10–205 or § 10–306 of the Tax – General Article. 13
(h) (1) Subject to the provisions of this subsection, the Maryland Department 14
of Labor and the State Department of Education shall jointly adopt regulations necessary 15
to carry out the provisions of this section. 16
(2) The Comptroller shall adopt regulations to provide for the computation 17
and carryover of the credit under § 10–704.7 of the Tax – General Article. 18
(3) The State Department of Assessments and Taxation shall adopt 19
regulations to provide for the computation and carryover of the credit under §§ 8–216 and 20
8–413 of the Tax – General Article. 21
(4) The Maryland Insurance Commissioner shall adopt regulations to 22
provide for the computation and carryover of the credit under § 6–115 of the Insurance 23
Article. 24
(i) The Maryland Department of Labor shall administer the tax credit and report 25
to the Governor, and, subject to § 2–1257 of the State Government Article, to the General 26
Assembly, before January 15 of each year on: 27
(1) Marketing activities for the credit under this section; 28
(2) The number of business entities who hired a qualified employee with a 29
disability during the preceding year; 30
(3) The number of qualified employees with disabilities: 31
(i) Hired in each business sector for the preceding year; and 32
SENATE BILL 93 5
(ii) Hired during the preceding year and employed for less than 1 1
year; 2
(4) A summary of the average hourly wages paid to qualified employees 3
with disabilities for the preceding year; 4
(5) The number and amount of credits claimed during the preceding year; 5
and 6
(6) The number and amount of credits claimed for child care or 7
transportation expenses, including a summary of the types of transportation expenses 8
incurred by business entities. 9
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 10
1, 2022, and shall be applicable to all taxable years beginning after December 31, 2021. 11