Form 307 - Credit For Employers Of Individuals With Disabilities

Instructions for Completing Form 307

Credit for Employers of Individuals with Disabilities

Next, compute the credit on Form 307

General Information Concerning This Credit

and claim the credit on your tax return.

This credit is for employers who employ an indi-

vidual with a disability and is available for taxable

When To File Form DEC and Form 307

years beginning on and after January 1, 1999 but

In order to allow sufficient time for certification from

before December 31, 2002. This credit provides

the state or federal agency providing the rehabili-

an income tax credit to each employer that em-

tative services, file Form DEC at least 60 days

ploys a person with a disability who has completed

before the due date of your income tax return so

or is completing rehabilitative services provided by

that the certification process will be completed in

the Department of Rehabilitative Services, the

time to file your income tax return. When Form

Department for the Blind and Vision Impaired or the

DEC has been returned, complete Form 307 to

United States Department of Veterans Affairs.

compute this credit and claim it on your tax return.

During the first two years, the allowable credit is

20% of the first $6,000 of wages actually paid an-

You may need to file for an extension of time

nually to each qualifying employee during the first

two taxable years of the employee’s employment.

to file or file an amended return

Unused credits may be carried forward for up to

If certification is not received before the due date

three years, but may not be carried back to prior

of your income tax return, you must file for an

years. The credit may not be computed on wages

extension of time to file your income tax return or

paid to an employee with a disability for any period

file an amended income tax return after the credit

in which the employer received federal or state

is computed. As a general rule, an amended re-

employment training benefits for the employee or

turn must be filed within three years from the

any period during which the employee was on strike.

due date of the original return. See the

See the definitions section for details on the

instructions for the tax return on which this credit

terms used when completing Forms DEC and

will be claimed for additional information on filing

307.

extensions and amended returns.

The credit is allowable against the following taxes

administered by the Virginia Department of Taxa-

Instructions For Completing Form 307

tion: individual income tax, estate and trust tax,

Instructions for completing Form 307 and Sched-

corporation income tax and bank franchise tax.

ule 307A are on back of each respective form.

The credit is also allowable against the following

Qualifying employees with disabilities will be listed

taxes administered by the Virginia State Corpora-

on Schedule 307A, then the credit will be trans-

tion Commission: taxes imposed upon insurance

ferred to Form 307. See the definitions section

companies and utility companies (under Sections

below to ensure that you compute the credit cor-

58.1-2500 et. seq. and Section 58.1-2620 et seq.,

rectly on qualifying employees.

Code of Virginia). The same tax credit cannot be

applied against different taxes.

Definitions

Process Overview For Claiming This Credit

“Qualified employee” means an otherwise quali-

fied person with a disability who has completed or

File Form DEC first.

is completing rehabilitative services provided by

Employers claiming this credit must complete Part

the Department of Rehabilitative Services, the De-

I of Form DEC and file it with the agency that pro-

partment for the Blind and Vision Impaired or the

vided rehabilitative services to the employee. That

U.S. Department of Veterans Affairs. An otherwise

agency will complete Part II of the form and return

qualified person claiming a disability (i) shall not be

it to you, certifying that qualifying training was pro-

a relative of any owner or the employer claiming the

vided. Allow at least 60 days for Form DEC to be

credit and (ii) shall not own, directly or indirectly,

completed and returned to you.

more than five percent in value of the outstanding

stock of a corporation claiming the credit.

Form 307 - Credit For Employers Of Individuals With Disabilities - 2002 Page 2

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