Bill Text: HI HB1870 | 2016 | Regular Session | Amended

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Bill Title: Persons Totally Disabled; Employment; Income Tax Credit

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Engrossed - Dead) 2016-03-18 - The committee on JDL deferred the measure. [HB1870 Detail]

Download: Hawaii-2016-HB1870-Amended.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	1870
TWENTY-EIGHTH LEGISLATURE, 2016		H.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-    Income tax credit for hiring a person totally disabled.  (a)  There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a credit for the hiring of a  person totally disabled that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

     (b)  The amount of the credit shall be equal to       per cent of the qualified wages for the first six months after a person totally disabled is initially hired.  A tax credit that exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted; provided that in no taxable year shall:

     (1)  The total amount of the tax credit claimed under this section exceed $         per taxpayer; and

     (2)  Any other deduction or credit claimed based on the person be used as the basis to calculate the tax credit.

     (c)  Certification of a person totally disabled for the purpose of claiming a credit under this section shall be submitted to the department of taxation on forms prescribed by the department of taxation.

     (d)  An individual shall not be treated as a person totally disabled unless, on or before the day on which the individual begins work for the employer, the employer has received certification from a qualified physician.  If an individual has been certified as a person totally disabled and the certification is incorrect because it was based on false information provided by the individual, the certification shall be revoked and wages paid by the employer after the date on which notice of revocation is received by the employer shall not be treated as qualified wages; provided that the department may disqualify wages that were paid to a non-qualified employee without the employer receiving notice that the certification was based on false information. 

     In any request for a certification of an individual as a person totally disabled, the employer shall certify that a good faith effort was made to determine that such individual is a person totally disabled.

     (e)  The following wages paid to a person totally disabled are ineligible to be claimed by the employer for this credit:

     (1)  No wages shall be taken into account under this section with respect to a person totally disabled who:

         (A)  Bears any of the relationships described in section 152(d)(2)(A) through (G) of the Internal Revenue Code to the taxpayer, or, if the taxpayer is a corporation, to an individual who owns, directly or indirectly, more than fifty per cent in value of the outstanding stock of the corporation (determined with the application of section 267(c) of the Internal Revenue Code);

         (B)  If the taxpayer is an estate or trust, is a grantor, beneficiary, or fiduciary of the estate or trust, or is an individual who bears any of the relationships described in section 152(d)(2)(A) through (G) of the Internal Revenue Code to a grantor, beneficiary, or fiduciary of the estate or trust; or

         (C)  Is a dependent (described in section 152(d)(2)(H) of the Internal Revenue Code) of the taxpayer, or, if the taxpayer is a corporation, of an individual described in subparagraph (A), or, if the taxpayer is an estate or trust, of a grantor, beneficiary, or fiduciary of the estate or trust; and

     (2)  No wages shall be taken into account under this section with respect to any person totally disabled if, prior to the day the individual is hired by the employer, the individual had been employed by the employer at any time.

     (f)  In the case of a successor employer referred to in section 3306(b)(1) of the Internal Revenue Code, the determination of the amount of the tax credit allowable under this section with respect to wages paid by the successor employer shall be made in the same manner as if the wages were paid by the predecessor employer referred to in the section; provided that only the current employer may claim the credit; provided further that the credit shall not be claimed multiple times for the same employee.

     (g)  Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the tax credit.

     (h)  The director of taxation:

     (1)  Shall prepare any forms necessary to claim a credit under this section;

     (2)  May require a taxpayer to furnish reasonable information to ascertain the validity of a claim for credit; and

     (3)  May adopt rules pursuant to chapter 91 to effectuate the purposes of this section.

     (i)  For purposes of this section:

     "Qualified physician" means:

     (1)  A physician or osteopathic physician licensed under chapter 453;

     (2)  A qualified out-of-state physician who is currently licensed to practice in the state in which the physician resides; or

     (3)  A commissioned medical officer in the United States Army, Navy, Marine Corps, or Public Health Service, engaged in the discharge of the officer's official duty.

     "Qualified wages" means wages attributable to work rendered by a person totally disabled for the six-month period after the individual is initially hired.

     "Wages" means wages, commissions, fees, salaries, bonuses, and every and all other kinds of remuneration for, or compensation attributable to, services performed by an employee for the employee's employer, including the cash value of all remuneration paid in any medium other than cash and the cost-of-living allowances and other payments included in gross income by section 235-7(b), but excluding income excluded from gross income by section 235-7 or other provisions of this chapter."

     SECTION 2.  New statutory material is underscored.
     SECTION 3.  This Act shall take effect on July 1, 2030, and shall apply to taxable years beginning after December 31, 2017.

 

Report Title:

Persons Totally Disabled; Employment; Income Tax Credit

 

Description:

Provides a taxpayer who hires a person totally disabled a nonrefundable tax credit for the six-month period after the individual is initially hired by the taxpayer.  (HB1870 HD2)

 

 

 

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