Form Tc-40hd - Employers Who Hire Persons With Disabilities Tax Credit Page 2
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1
2General Procedures and Instructions
An employer may take a nonrefundable credit against the
prior to working for the employer who is claiming the tax
corporate franchise or income tax based on amounts
credit; or (2) were eligible for services from the Division
paid to persons with disabilities who work for the
of Services for People with Disabilities at the time the
employer.
individual began working for the employer claiming the
tax credit.
The credit applies only to the wages paid by an employer
An employer qualifies for this credit only if the individual
to individuals with disabilities. The credit shall be equal to
with a disability: (1) works in this state for at least 180
10 percent of the gross wages earned in the 180 days by
days in a taxable year for the employer; and (2) is paid at
the employee with disabilities; plus 20 percent of the
least minimum wage by the employer. The credit is
gross wages earned in the remainder of the taxable year
limited to $3,000 per disabled employee during the
by the employee with disabilities.
taxable year. The credit is allowed only for the first two
For example, if an employee with disabilities begins
years the individual with a disability is employed by the
working with an employer March 1, and the employer is a
employer.
calendar year filer, the employer shall calculate its credit
Credit amounts greater than Utah corporation tax liability
using the following steps: (1) multiply the wages earned
in the tax year in which credit is earned may be carried
by the employee from March 1 through August 27 by 10
forward to the following two tax years.
Carryforward
percent; (2) multiply the wages earned by the employee
credits shall be applied against the tax liability of any
from August 28 through December 31 by 20 percent; and
year before the application of any credits earned in the
(3) add those two amounts.
tax year on a first-earned first-used basis.
For purposes of this credit, individuals with disabilities
Do not send this form with your return. Keep this
are defined as individuals who : (1) have been receiving
form and all related documents with your records.
services from a day-training program or from a supported
employment program for persons with disabilities, which
PART B
of this form, must be completed and signed by
is certified by the Department of Human Services as a
an authorized representative of the Division of Services
qualifying program, for at least six consecutive months
for People With Disabilities.
PART C - Worksheet Instructions
Column A:
List the individuals you employ who meet the definition of an individual with a disability.
Column B:
Enter the number of months the disabled employee worked in the taxable year for the business.
Column C:
Provide the social security number of the individuals listed in column A.
Column D:
Enter the first 180 days of gross wages paid to employees with disabilities for the taxable year.
Column E:
Enter the remainder of gross wages paid to employees with disabilities for the taxable year.
Column F:
Enter 10 percent of the amount listed in Column D.
Column G:
Enter 20 percent of the amount listed in Column E.
Column H:
Add columns F and G. If the amount of credit for the employee with disabilities is greater than $3,000, enter
only $3,000.
Line Instructions
Line 1:
Add the amounts in Column H and enter the results on line 1.
Line 2:
Enter the tax liability shown on the corporation return.
Line 3:
Enter the lesser of line 1 or line 2. This is the allowable credit.
Lines 4 - 6:
If the initial credit (line 1) is greater than the tax liability (line 2), complete lines 4 through 6 to calculate the
carryover credit for the following two years.
Division of Services for People with Disabilities
195 N 1950 W
SLC, UT 84116
Telephone 801-538-4200
hsdspd.utah.gov
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