58.1-439.11 - Employees with disabilities tax credit.
§ 58.1-439.11. Employees with disabilities tax credit.
A. As used in this section, unless the context clearly requires otherwise:
"Qualified employee" means an otherwise qualified person with a disabilitywho has completed or is completing rehabilitative services from theDepartment of Rehabilitative Services, the Department for the Blind andVision Impaired or the U.S. Department of Veterans Affairs. An otherwisequalified person with a disability (i) shall not be a relative of any owneror the employer claiming the credit and (ii) shall not own, directly orindirectly, more than five percent in value of the outstanding stock of acorporation claiming the credit. As used herein, "relative" means a spouse,child, grandchild, parent or sibling of an owner or employer, and "owner"means, in the case of a corporation, any person who owns five percent or moreof the corporation's stock.
"Wages" means wages, within the meaning of § 51(c)(1), (2) and (3) of theInternal Revenue Code without regard to § 51(c)(4) of the Internal RevenueCode, that are paid by an employer to an employee for services performed inthe employer's trade or business.
B. Except as provided in subsection D of this section, an employer may claima tax credit in the amounts determined under subsection C of this section forthe wages of a qualified employee that are paid in the taxable year for whichthe employer claims the credit. The same tax credit shall not be applied morethan once against different taxes by the same taxpayer.
C. For taxable years beginning on and after January 1, 1999, but beforeDecember 31, 2002, an employer shall be allowed a credit against the taxesimposed by Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.), and 10 (§58.1-400 et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200 et seq.); Article 1(§ 58.1-2500 et seq.) of Chapter 25; or Article 2 (§ 58.1-2620 et seq.) ofChapter 26 of this title in an amount equal to twenty percent of the first$6,000 of wages paid annually to each qualified employee during the first twotaxable years of such employee's employment.
D. An employer shall not claim the credit allowed under this section for aqualified employee who is on strike or for whom the employer simultaneouslyreceives federal or state employment training benefits. Furthermore, thecredit allowed under this section shall be based on actual wages paid duringthe applicable taxable year.
E. For purposes of this section, the amount of any credit attributable to apartnership, electing small business corporation (S corporation), or limitedliability company shall be allocated to the individual partners,shareholders, or members, respectively, in proportion to their ownership orinterest in such business entities.
F. An employer shall be entitled to the credit granted under this sectiononly for those qualified employees who have been certified as otherwisequalified persons with disabilities to the Department of Taxation by theDepartment of Rehabilitative Services, the Department for the Blind andVision Impaired or the U.S. Department of Veterans Affairs. The TaxCommissioner shall promulgate regulations, in accordance with theAdministrative Process Act (§ 2.2-4000 et seq.), establishing procedures forclaiming the credit provided by this section. The Department ofRehabilitative Services, the Department for the Visually Handicapped or theU.S. Department of Veterans Affairs shall review requests for certificationsubmitted by employers and shall advise the Tax Commissioner whether anemployee qualifies.
G. Any credit not usable for the taxable year may be carried over for thenext three taxable years. The amount of credit allowed pursuant to thissection shall not exceed the tax imposed for such taxable year. No creditshall be carried back to a preceding taxable year. If an employer that issubject to the tax limitation imposed pursuant to this subsection is allowedanother credit pursuant to any other section of this Code, or has a creditcarryover from a preceding taxable year, such employer shall be considered tohave first utilized any credit allowed which does not have a carryoverprovision, and then any credit which is carried forward from a precedingtaxable year, prior to the utilization of any credit allowed pursuant to thissection.
H. No employer shall be eligible to claim a credit under this section if theemployer is claiming a tax credit for the same employee under § 58.1-439.
I. The Tax Commissioner shall report annually to the Chairmen of the HouseFinance and Senate Finance Committees on the status and implementation of thecredit established by this section, including certifications for otherwisequalified persons with disabilities.
(1999, c. 304.)