Instructions For Maryland Form 500cr - Business Tax Credits

PART B - EMPLOYMENT OPPORTUNITY TAX CREDIT

Part B-III Credit for Qualified Employment Opportunity Employ-

ees (hired on or after June 1, 1998). A credit is allowed for each

General Requirements. Businesses that employ persons

new AFDC recipient employee for a two-year period beginning with

receiving “Aid to Families with Dependent Children” (AFDC) may

the year the employee was qualified. The credit for each AFDC

be eligible for tax credits based upon wages paid to qualified

recipient hired shall be equal to 30% of the first $6,000 of qualified

employees and child care and transportation expenses paid on

first-year wages for the first year of employment and 20% of the first

behalf of qualified employees. The available credits depend on

$6,000 of qualified wages for the second year of employment. A

whether the qualified employees were hired prior to or after June

special one-year credit may be taken for 40% of the first $10,000

1, 1998. See the specific requirements for more details.

of wages paid to an employment opportunity employee if:

Qualifying employees are those who are residents of Mary-

1. the employee has been a recipient of temporary assis-

land and who, immediately before going to work for the

tance under the AFDC program for at least 18 of the last

business, were Maryland residents and recipients of state

24 months (whether consecutive or not); and

benefits from the AFDC Program. Qualified employment

opportunity employees are those who are certified as such by

2. has been employed for a full year by the employer

the Maryland Department of Labor, Licensing and Regulation,

claiming the credit.

Division of Employment and Training, 1100 N. Eutaw Street,

The same employee may not be used to qualify for both the two-

Baltimore, MD 21201 (410-767-2080).

year and special one-year credits.

Qualifying child care expenses are those expenses incurred by

The employer is not entitled to claim the credit until employment

a business to enable a qualified employment opportunity

has continued for at least one full year unless the employee (a)

employee of the business to be gainfully employed.

voluntarily leaves the employer, (b) becomes disabled or (c) is

Qualifying transportation expenses are those expenses incurred

terminated for cause.

by a business to enable a qualified employment opportunity

Part B-IV Credit for Qualified Child Care and Transportation

employee to travel to and from work.

Expenses (for employees hired on or after June 1, 1998). A

In addition, an employee may not have been hired to replace a

credit is allowed for the child care expenses incurred by the

laid-off employee or to replace an employee who is on strike or

employer for the children of qualified employees. If the employer

for whom the business simultaneously receives federal or state

provides or pays for approved day care services for a child or

employment training benefits.

children of the employee, or pays for transportation expenses

that are incurred to enable a qualified employee with a disability

A business must also notify the Maryland Department of Busi-

to travel to and from work, the employer shall be eligible for an

ness and Economic Development that the qualified employment

additional credit of up to $600 for the first year of employment

opportunity employee has been hired.

and up to $500 for the second year. To verify if a child care

center qualifies as an approved provider, contact the Department

For further information on qualified individuals and the require-

of Human Resources, Child Care Administrator for the county or

ments businesses must meet to qualify, contact the Maryland

city in which the child care center is located.

Department of Labor, Licensing and Regulation, Division of

Employment and Training, 1100 N. Eutaw Street, Baltimore, MD

Part B-Summary. Add lines 20,25,30 and 34.

21201 (410-767-2047).

Whenever an Employment Opportunity Tax Credit is claimed

Specific Requirements.

against the income tax, an addition modification must be made

in the taxable year for which the wages or child care expenses

Part B-1 Credit for Qualified Employment Opportunity

claimed as a credit were paid. The modification increases the

Employees (hired prior to June 1, 1998). A credit is allowed for

taxable income base to the extent of the total credit claimed

each new AFDC recipient employee for a three-year period

against the tax liability for the taxable year.

beginning with the year the employee was qualified. The credit

for each AFDC recipient hired shall be equal to and may not

PART C - EMPLOYMENT OF INDIVIDUALS WITH

exceed 30% of the first $6,000 of qualified first-year wages for

DISABILITIES TAX CREDIT

the first year of employment, 20% of the first $6,000 of qualified

wages for the second year of employment and 10% of the first

General Requirements. Businesses who employ persons with

$6,000 of qualified wages for the third year of employment.

disabilities as certified by the State Department of Education may

be eligible for tax credits based upon wages paid to the qualified

The employer is not entitled to claim the credit until employment

employees, child care expenses and transportation expenses paid

has continued for at least one full year unless the employee (a)

on behalf of the qualified employees.

voluntarily leaves the employer, (b) becomes disabled or (c) is

terminated for cause.

Qualifying employees with a disability are those who are certified

as such by the Maryland State Department of Education,

Part B-II Credit for Qualified Child Care Expenses (for

Division of Rehabilitation Services, 2301 Argonne Drive,

employees hired prior to June 1, 1998). A credit is allowed for

Baltimore, MD 21218 (1-888-554-0334).

the child care expenses incurred by the employer for the children

of qualified employees described in Part B-I. If the employer

In addition to being certified, a “Qualified Employee” with a

provides or pays for approved day care services for a child or

disability means an individual who:

children of the employee, the employer shall be eligible for an

1. meets the definition of an individual with a disability as

additional credit of $600 for the first year of employment, $500

defined by the Americans with Disability Act;

for the second year and $400 for the third year. To verify if a

child care center qualifies as an approved provider, contact the

2. has a disability that presently constitutes an impediment

Department of Human Resources, Child Care Administrator for

to obtaining or maintaining employment or to transitioning

the county or city in which the child care center is located.

from school to work; and

3. is ready for employment.

Instructions For Maryland Form 500cr - Business Tax Credits - 1999 Page 2

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