Section 29 Disability Employment Tax Credit 1

Said section 6 of said chapter 62, as most recently amended by section 57 of chapter 358 of the acts of 2020, is hereby further amended by adding the following 3 subsections:-

(x) A taxpayer shall be allowed a credit in an amount equal to employment-related expenses allowed for purposes of determining the credit allowable under section 21 of the Code; provided, however, that, for purposes of this subsection, the amount of allowable employment-related expenses may exceed those claimed under said section 21 of the Code but shall not exceed a total of $240 if there is 1 qualifying individual, as defined in said section 21 of the Code, with respect to the taxpayer or $480 if there are not less than 2 qualifying individuals with respect to the taxpayer. If the amount of the credit allowed under this subsection exceeds the taxpayer's tax liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer the entire amount of the excess.

(y) A taxpayer who maintains a household that includes as a member: (i) at least 1 individual under the age of 12 who qualifies for exemption as a dependent under section 151 of the Code; or (ii) at least 1 individual who is: (A) not less than 65 years of age or who is disabled; and (B) who qualifies as a dependent under section 152 of the Code, shall be allowed a credit in an amount equal to $180 if there is 1 such dependent with respect to the taxpayer or $360 if there are not less than 2 such dependents with respect to the taxpayer; provided, however, that a credit shall not be allowed under this subsection if a credit is claimed under subsection (x); provided further, that if the taxpayer is married at the close of the taxable year, the credit provided in this subsection shall be allowed if the taxpayer and the taxpayer's spouse file a joint return for the taxable year or if the taxpayer qualifies as a head of household under section 2(b) of the Code; and provided further, that for the purposes of this subsection, "maintains a household" shall have the same meaning as in section 21 of the Code. If the amount of the credit allowed under this subsection exceeds the taxpayer's tax liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer the entire amount of the excess.

(z)(1) An employer that is not a business corporation subject to the excise under chapter 63, shall be allowed a credit equal to $5,000 or 30 per cent of the wages paid to each qualified employee with a disability in the first taxable year of employment, whichever is less, against the tax liability imposed by this chapter. Such employer shall be allowed a credit equal to $2,000 or 30 per cent of the wages paid to each qualified employee with a disability in each subsequent taxable year of employment, whichever is less, against the tax liability imposed by this chapter. If a credit allowed by this subsection exceeds the tax otherwise due under this chapter, 100 per cent of the balance of such credit may, at the option of the taxpayer, be refundable to the taxpayer. In order to qualify, the employee with a disability shall be: (i) certified by the Massachusetts rehabilitation commission as meeting the definition of disability under the Americans with Disabilities Act, 42 U.S.C. 12102; (ii) capable of working independently; (iii) physically or mentally impaired in a manner that constitutes or results in a substantial impediment to employment for the individual; and (iv) hired by the employer after July 1, 2021.

(2) To be eligible for a credit under this subsection: (i) the primary place of employment and the primary place of residence of the employee shall be in the commonwealth; (ii) the business shall receive the applicable certification from the Massachusetts rehabilitation commission that the employee qualifies not later than the day the employee begins work; provided, that reasonable exceptions to this timeframe may be established through regulation; and (iii) the employee shall be employed by the business for a period of not less than 12 consecutive months prior to and in the taxable year in which the credit is claimed.

(3) An employer that is eligible for and claims the credit allowed under this subsection in a taxable year with respect to a qualified employee with a disability shall be eligible for such credit in the subsequent taxable year with respect to such qualified employee. Any credit allowed under this subsection shall not be transferable.

(4) The secretary of health and human services, in consultation with the commissioner, shall promulgate regulations establishing an application process for the credit.

(5) The credit under this subsection shall be attributed on a pro rata basis to the owners, partners or members of the legal entity entitled to the credit under this subsection, and shall be allowed as a credit against the tax due under this chapter of such owners, partners or members, in a manner determined by the commissioner.