Maryland 2022 Regular Session

Maryland Senate Bill SB93 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	LAWRENCE J. HOGAN, JR., Governor Ch. 533
2	1
3		-	– 1 –
4		-	Chapter 533
5		-	(Senate Bill 93)
6	2
7		-	AN ACT concerning
	3	+	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
	4	+	[Brackets] indicate matter deleted from existing law.
	5	+	Underlining indicates amendments to bill.
	6	+	Strike out indicates matter stricken from the bill by amendment or deleted from the law by
	7	+	amendment.
	8	+	sb0093
8	9
9		-	Tax Credits – Employment of Individuals With Disabilities
	10	+	SENATE BILL 93
	11	+	O3, Q3, Q7 2lr1058
	12	+	(PRE–FILED)
	13	+	By: Senator Kramer
	14	+	Requested: October 29, 2021
	15	+	Introduced and read first time: January 12, 2022
	16	+	Assigned to: Budget and Taxation
	17	+	Committee Report: Favorable
	18	+	Senate action: Adopted
	19	+	Read second time: February 8, 2022
10	20
11		-	FOR the purpose of altering the amount of certain credits against the State income tax,
12		-	insurance premium tax, financial institution franchise tax, and public service
13		-	company franchise tax for certain wages paid and certain child care or transportation
14		-	expenses incurred by certain business entities with respect to certain employees with
15		-	disabilities; and generally relating to tax credits for wages paid and child care or
16		-	transportation expenses incurred by a business entity with respect to the
17		-	employment of individuals with disabilities.
	21	+	CHAPTER ______
18	22
19		-	BY repealing and reenacting, with amendments,
20		-	Article – Education
21		-	Section 21–309
22		-	Annotated Code of Maryland
23		-	(2018 Replacement Volume and 2021 Supplement)
	23	+	AN ACT concerning 1
24	24
25		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
26		-	That the Laws of Maryland read as follows:
	25	+	Tax Credits – Employment of Individuals With Disabilities 2
27	26
28		-	Article – Education
	27	+	FOR the purpose of altering the amount of certain credits against the State income tax, 3
	28	+	insurance premium tax, financial institution franchise tax, and public service 4
	29	+	company franchise tax for certain wages paid and certain child care or transportation 5
	30	+	expenses incurred by certain business entities with respect to certain employees with 6
	31	+	disabilities; and generally relating to tax credits for wages paid and child care or 7
	32	+	transportation expenses incurred by a business entity with respect to the 8
	33	+	employment of individuals with disabilities. 9
29	34
30		-	21–309.
	35	+	BY repealing and reenacting, with amendments, 10
	36	+	Article – Education 11
	37	+	Section 21–309 12
	38	+	Annotated Code of Maryland 13
	39	+	(2018 Replacement Volume and 2021 Supplement) 14
31	40
32		-	(a) (1) In this section the following words have the meanings indicated.
	41	+	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
	42	+	That the Laws of Maryland read as follows: 16
33	43
34		-	~~(2) “Business~~ ~~entity” means:~~
	44	+	Article – Education 17
35	45
36		-	(i) A person conducting or operating a trade or business in
37		-	Maryland; or
	46	+	21–309. 18
38	47
39		-	(ii) An organization operating in Maryland that is exempt from
40		-	taxation under § 501(c)(3) or (4) of the Internal Revenue Code.
	48	+	(a) (1) In this section the following words have the meanings indicated. 19 2 SENATE BILL 93
41	49
42		-	(3) “Division” means the Division of Rehabilitation Services of the
43		-	Maryland State Department of Education.
44	50
45		-	(4) “Qualified child care or transportation expenses” means:
46	51
47		-	(i) State regulated child care expenses that are incurred by a
48		-	business entity to enable a qualified employee with a disability to be gainfully employed;
49		-	or Ch. 533 2022 LAWS OF MARYLAND
	52	+	(2) “Business entity” means: 1
50	53
51		-	– 2 –
	54	+	(i) A person conducting or operating a trade or business in 2
	55	+	Maryland; or 3
52	56
53		-	(ii) ~~Transportation expenses~~ that ~~are incurred by a business entity~~
54		-	~~to enable a qualified employee with a disability to travel to and from work~~.
	57	+	(ii) An organization operating in Maryland that is exempt from 4
	58	+	taxation under § 501(c)(3) or (4) of the Internal Revenue Code. 5
55	59
56		-	(5) (i) “Qualified employee with a disability” means an individual who:
	60	+	(3) “Division” means the Division of Rehabilitation Services of the 6
	61	+	Maryland State Department of Education. 7
57	62
58		-	1. Meets the definition of an individual with a disability as
59		-	defined by the Americans with Disabilities Act;
	63	+	(4) “Qualified child care or transportation expenses” means: 8
60	64
61		-	2. Has a disability that presently constitutes an impediment
62		-	to obtaining or maintaining employment or to transitioning from school to work;
	65	+	(i) State regulated child care expenses that are incurred by a 9
	66	+	business entity to enable a qualified employee with a disability to be gainfully employed; 10
	67	+	or 11
63	68
64		-	3. Is ready for employment; and
	69	+	(ii) Transportation expenses that are incurred by a business entity 12
	70	+	to enable a qualified employee with a disability to travel to and from work. 13
65	71
66		-	4. Has been determined by the Division or the Maryland
67		-	Department of Labor, in consultation with the Division, as having met the criteria of a
68		-	qualified employee with a disability established under this section.
	72	+	(5) (i) “Qualified employee with a disability” means an individual who: 14
69	73
70		-	(ii) “Qualified employee with a disability” includes:
	74	+	1. Meets the definition of an individual with a disability as 15
	75	+	defined by the Americans with Disabilities Act; 16
71	76
72		-	1. An individual who has been determined by the Maryland
73		-	Department of Labor, in consultation with the United States Veterans Administration, as
74		-	having been discharged or released from active duty in the armed forces of the United
75		-	States for a service–connected disability; and
	77	+	2. Has a disability that presently constitutes an impediment 17
	78	+	to obtaining or maintaining employment or to transitioning from school to work; 18
76	79
77		-	2. Any other individual meeting the definition of
78		-	subparagraph (i) of this paragraph, whether or not the individual receives services from
79		-	the Division.
	80	+	3. Is ready for employment; and 19
80	81
81		-	(6) “Wages” means wages, within the meaning of § 51(c)(1), (2), and (3) of
82		-	the Internal Revenue Code without regard to § 51(c)(4) of the Internal Revenue Code that
83		-	are paid by a business entity to an employee for services performed in a trade or business
84		-	of the employer.
	82	+	4. Has been determined by the Division or the Maryland 20
	83	+	Department of Labor, in consultation with the Division, as having met the criteria of a 21
	84	+	qualified employee with a disability established under this section. 22
85	85
86		-	(b) (1) Except as provided in subsection (e) of this section, a business entity
87		-	may claim a tax credit in the amounts determined under subsections (c) and (d) of this
88		-	section for the wages and qualified child care or transportation expenses with respect to a
89		-	qualified employee with a disability that are paid in the taxable year for which the business
90		-	entity claims the credit.
	86	+	(ii) “Qualified employee with a disability” includes: 23
91	87
92		-	(2) The same tax credit cannot be applied more than once against different
93		-	taxes by the same taxpayer.
	88	+	1. An individual who has been determined by the Maryland 24
	89	+	Department of Labor, in consultation with the United States Veterans Administration, as 25
	90	+	having been discharged or released from active duty in the armed forces of the United 26
	91	+	States for a service–connected disability; and 27
94	92
95		-	(c) For each taxable year, for the wages paid to each qualified employee with a
96		-	disability, a credit is allowed in an amount equal to 30% of up to the first [$9,000] $15,000 LAWRENCE J. HOGAN, JR., Governor Ch. 533
	93	+	2. Any other individual meeting the definition of 28
	94	+	subparagraph (i) of this paragraph, whether or not the individual receives services from 29
	95	+	the Division. 30
	96	+	SENATE BILL 93 3
97	97
98		-	– 3 –
99		-	of the wages paid to the qualified employee with a disability during each of the first 2 years
100		-	of employment.
101	98
102		-	(d) For each taxable year, for child care provided or paid for by a business entity
103		-	for the children of a qualified employee with a disability, or transportation expenses that
104		-	are incurred by a business entity to enable a qualified employee with a disability to travel
105		-	to and from work, a credit is allowed in an amount equal to up to [$900] $1,500 of the
106		-	qualified child care or transportation expenses incurred for each qualified employee with a
107		-	disability during each of the first 2 years of employment.
	99	+	(6) “Wages” means wages, within the meaning of § 51(c)(1), (2), and (3) of 1
	100	+	the Internal Revenue Code without regard to § 51(c)(4) of the Internal Revenue Code that 2
	101	+	are paid by a business entity to an employee for services performed in a trade or business 3
	102	+	of the employer. 4
108	103
109		-	(e) (1) A business entity may not claim the credit under this section for an
110		-	employee:
	104	+	(b) (1) Except as provided in subsection (e) of this section, a business entity 5
	105	+	may claim a tax credit in the amounts determined under subsections (c) and (d) of this 6
	106	+	section for the wages and qualified child care or transportation expenses with respect to a 7
	107	+	qualified employee with a disability that are paid in the taxable year for which the business 8
	108	+	entity claims the credit. 9
111	109
112		-	(i) ~~Who is hired to replace a laid–off employee or to replace an~~
113		-	~~employee who is on strike;~~ or
	110	+	(2) The same tax credit cannot be applied more than once against different 10
	111	+	taxes by the same taxpayer. 11
114	112
115		-	(ii) For whom the business entity simultaneously receives federal or
116		-	State employment training benefits.
	113	+	(c) For each taxable year, for the wages paid to each qualified employee with a 12
	114	+	disability, a credit is allowed in an amount equal to 30% of up to the first [$9,000] $15,000 13
	115	+	of the wages paid to the qualified employee with a disability during each of the first 2 years 14
	116	+	of employment. 15
117	117
118		-	(2) A business entity may not claim the credit under this section until it
119		-	has notified the Division that a qualified employee with a disability has been hired.
	118	+	(d) For each taxable year, for child care provided or paid for by a business entity 16
	119	+	for the children of a qualified employee with a disability, or transportation expenses that 17
	120	+	are incurred by a business entity to enable a qualified employee with a disability to travel 18
	121	+	to and from work, a credit is allowed in an amount equal to up to [$900] $1,500 of the 19
	122	+	qualified child care or transportation expenses incurred for each qualified employee with a 20
	123	+	disability during each of the first 2 years of employment. 21
120	124
121		-	(3) A business entity may claim a credit in the amount provided in
122		-	paragraph (4) of this subsection for an employee whose employment lasts less than 1 year
123		-	if the employee:
	125	+	(e) (1) A business entity may not claim the credit under this section for an 22
	126	+	employee: 23
124	127
125		-	(i) Voluntarily terminates employment with the employer;
	128	+	(i) Who is hired to replace a laid–off employee or to replace an 24
	129	+	employee who is on strike; or 25
126	130
127		-	(ii) ~~Is unable to continue employment due to a further disability~~ or
128		-	~~death; or~~
	131	+	(ii) For whom the business entity simultaneously receives federal or 26
	132	+	State employment training benefits. 27
129	133
130		-	(iii) Is terminated for cause.
	134	+	(2) A business entity may not claim the credit under this section until it 28
	135	+	has notified the Division that a qualified employee with a disability has been hired. 29
131	136
132		-	(4) (i) If a business entity is entitled to a tax credit for an employee who
133		-	is employed for less than 1 year because the employee voluntarily terminates employment
134		-	with the employer to take another job, the business entity may claim a tax credit of 30% of
135		-	up to the first [$9,000] $15,000 of the wages paid to the employee during the course of
136		-	employment.
	137	+	(3) A business entity may claim a credit in the amount provided in 30
	138	+	paragraph (4) of this subsection for an employee whose employment lasts less than 1 year 31
	139	+	if the employee: 32
137	140
138		-	(ii) If a business entity is entitled to a tax credit for an employee who
139		-	is employed for less than 1 year for a reason other than that described in subparagraph (i)
140		-	of this paragraph, the amount of the credit shall be reduced by the proportion of a year that
141		-	the employee did not work.
142		-	Ch. 533 2022 LAWS OF MARYLAND
	141	+	(i) Voluntarily terminates employment with the employer; 33
143	142
144		-	– 4 –
145		-	(f) If the credit allowed under this section in any taxable year exceeds the total
146		-	tax otherwise payable by the business entity for that taxable year, a business entity may
147		-	apply the excess as a credit for succeeding taxable years until the earlier of:
	143	+	(ii) Is unable to continue employment due to a further disability or 34
	144	+	death; or 35
	145	+	4 SENATE BILL 93
148	146
149		-	(1) The full amount of the excess is used; or
150	147
151		-	(2) The expiration of the 5th taxable year after the taxable year in which
152		-	the wages or qualified child care or transportation expenses for which the credit is claimed
153		-	are paid.
	148	+	(iii) Is terminated for cause. 1
154	149
155		-	(g) If a credit is claimed under this section, the claimant must make the addition
156		-	required in § 10–205 or § 10–306 of the Tax – General Article.
	150	+	(4) (i) If a business entity is entitled to a tax credit for an employee who 2
	151	+	is employed for less than 1 year because the employee voluntarily terminates employment 3
	152	+	with the employer to take another job, the business entity may claim a tax credit of 30% of 4
	153	+	up to the first [$9,000] $15,000 of the wages paid to the employee during the course of 5
	154	+	employment. 6
157	155
158		-	(h) (1) Subject to the provisions of this subsection, the Maryland Department
159		-	of Labor and the State Department of Education shall jointly adopt regulations necessary
160		-	to carry out the provisions of this section.
	156	+	(ii) If a business entity is entitled to a tax credit for an employee who 7
	157	+	is employed for less than 1 year for a reason other than that described in subparagraph (i) 8
	158	+	of this paragraph, the amount of the credit shall be reduced by the proportion of a year that 9
	159	+	the employee did not work. 10
161	160
162		-	(2) The Comptroller shall adopt regulations to provide for the computation
163		-	and carryover of the credit under § 10–704.7 of the Tax – General Article.
	161	+	(f) If the credit allowed under this section in any taxable year exceeds the total 11
	162	+	tax otherwise payable by the business entity for that taxable year, a business entity may 12
	163	+	apply the excess as a credit for succeeding taxable years until the earlier of: 13
164	164
165		-	(3) The State Department of Assessments and Taxation shall adopt
166		-	regulations to provide for the computation and carryover of the credit under §§ 8–216 and
167		-	8–413 of the Tax – General Article.
	165	+	(1) The full amount of the excess is used; or 14
168	166
169		-	(4) The ~~Maryland Insurance Commissioner shall adopt regulations to~~
170		-	~~provide~~ for ~~the computation and carryover of~~ the credit ~~under § 6–115 of the Insurance~~
171		-	~~Article~~.
	167	+	(2) The expiration of the 5th taxable year after the taxable year in which 15
	168	+	the wages or qualified child care or transportation expenses for which the credit is claimed 16
	169	+	are paid. 17
172	170
173		-	(i) The Maryland Department of Labor shall administer the tax credit and report
174		-	to the Governor, and, subject to § 2–1257 of the State Government Article, to the General
175		-	Assembly, before January 15 of each year on:
	171	+	(g) If a credit is claimed under this section, the claimant must make the addition 18
	172	+	required in § 10–205 or § 10–306 of the Tax – General Article. 19
176	173
177		-	(1) Marketing activities for the credit under this section;
	174	+	(h) (1) Subject to the provisions of this subsection, the Maryland Department 20
	175	+	of Labor and the State Department of Education shall jointly adopt regulations necessary 21
	176	+	to carry out the provisions of this section. 22
178	177
179		-	(2) The ~~number of business entities who hired a qualified employee with a~~
180		-	~~disability during~~ the ~~preceding year;~~
	178	+	(2) The Comptroller shall adopt regulations to provide for the computation 23
	179	+	and carryover of the credit under § 10–704.7 of the Tax – General Article. 24
181	180
182		-	(3) The number of qualified employees with disabilities:
	181	+	(3) The State Department of Assessments and Taxation shall adopt 25
	182	+	regulations to provide for the computation and carryover of the credit under §§ 8–216 and 26
	183	+	8–413 of the Tax – General Article. 27
183	184
184		-	(i) Hired in each business sector for the preceding year; and
	185	+	(4) The Maryland Insurance Commissioner shall adopt regulations to 28
	186	+	provide for the computation and carryover of the credit under § 6–115 of the Insurance 29
	187	+	Article. 30
185	188
186		-	(ii) Hired during the preceding year and employed for less than 1
187		-	year;
	189	+	(i) The Maryland Department of Labor shall administer the tax credit and report 31
	190	+	to the Governor, and, subject to § 2–1257 of the State Government Article, to the General 32
	191	+	Assembly, before January 15 of each year on: 33
188	192
189		-	(4) ~~A summary of~~ the ~~average hourly wages paid to qualified employees~~
190		-	~~with disabilities for the preceding year; LAWRENCE J.~~ ~~HOGAN, JR., Governor Ch.~~ ~~533~~
	193	+	(1) Marketing activities for the credit under this section; 34
	194	+	SENATE BILL 93 5
191	195
192		-	– 5 –
193	196
194		-	(5) The number ~~and amount~~ of ~~credits claimed during the preceding year;~~
195		-	~~and~~
	197	+	(2) The number of business entities who hired a qualified employee with a 1
	198	+	disability during the preceding year; 2
196	199
197		-	(6) The number and amount of credits cl aimed for child care or
198		-	transportation expenses, including a summary of the types of transportation expenses
199		-	incurred by business entities.
	200	+	(3) The number of qualified employees with disabilities: 3
200	201
201		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
202		-	1, 2022, and shall be applicable to all taxable years beginning after December 31, 2021.
	202	+	(i) Hired in each business sector for the preceding year; and 4
203	203
204		-	Enacted under Article II, § 17(c) of the Maryland Constitution, May 29, 2022.
	204	+	(ii) Hired during the preceding year and employed for less than 1 5
	205	+	year; 6
	206	+
	207	+	(4) A summary of the average hourly wages paid to qualified employees 7
	208	+	with disabilities for the preceding year; 8
	209	+
	210	+	(5) The number and amount of credits claimed during the preceding year; 9
	211	+	and 10
	212	+
	213	+	(6) The number and amount of credits claimed for child care or 11
	214	+	transportation expenses, including a summary of the types of transportation expenses 12
	215	+	incurred by business entities. 13
	216	+
	217	+	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 14
	218	+	1, 2022, and shall be applicable to all taxable years beginning after December 31, 2021. 15
	219	+
	220	+
	221	+
	222	+	Approved:
	223	+	________________________________________________________________________________
	224	+	Governor.
	225	+	________________________________________________________________________________
	226	+	President of the Senate.
	227	+	________________________________________________________________________________
	228	+	Speaker of the House of Delegates.