Maryland Disability Employment Tax Credit - Workforce Development & Adult Learning
What is it?
The Maryland Disability Employment Tax Credit (MDETC) is a Maryland State tax credit that allows employers to claim credit for employees with disabilities hired on or after December 31, 2014..
For each taxable year a credit is allowed in an amount equal to 30% of up to the first $6000 ($1800) of wages paid during the first year and 20% of up to the first $6000 ($1200) during the second year of employment.
Also, under MDETC, employers can benefit from a tax credit for work-related childcare or transportation expenses paid by the employer. A credit of up to $600 of the qualified childcare or transportation expenses incurred during the first year of employment, and up to $500 for the second year.
The MDETC may be claimed concurrently with any available federal tax credits for which the employee may be eligible.
The MDETC does not apply to:
- Persons hired to replace laid-off employees or individuals on strike; or
- A business simultaneously receiving federal or State employment training benefits; or
- A business claiming a State tax credit under the "work not welfare" law for the same individual.
There are special provisions for employment lasting less than one year.
Who may qualify?
The tax credit is targeted to enhance employment opportunities for persons with disabilities as defined by the Americans with Disabilities Act (ADA). Individuals with disabilities who have been certified by the Maryland State Department of Education, Division of Rehabilitation Services (DORS) or the U.S. Department of Veteran Affairs (VA) as having met established criteria qualify for the MDETC.
Once the individual is certified, the employer may claim the tax credit for the individual who has been hired.
How do employers obtain the tax credit?
- Individuals with disabilities seeking employment may present a signed MDETC Voucher to the potential employer.
- Upon hiring a person presenting a Voucher the employer will complete the employer's portion of the voucher and return it to DORS within 30 days.
- If DORS determines that the individual is qualified for the tax credit, a Certificate of Eligibility for the MDETC will be returned to the employer.
- The employer must retain the Certificate to document and justify including the tax credit on its tax return.
- Presentation of a Voucher does not necessary mean that an individual meets the qualifications for a particular job. Employers should use their usual screening and hiring methods in accordance with the Americans with Disabilities Act (ADA) in making hiring decisions.
Note: As a reminder, employers may not ask an applicant if he or she is a person with a disability for tax credit or other purposes.
Where to go for more information
Department of Labor, Licensing and Regulation (DLLR)
Tax Credit Program Administrator
1100 N. Eutaw Street, Room 201
Baltimore, MD 21201