23.0828.01000
Sixty-eighth
Legislative Assembly HOUSE BILL NO. 1244
of North Dakota
Introduced by
Representative Headland
1 A BILL for an Act to amend and reenact section 57-38-01.16 of the North Dakota Century Code,
2 relating to the income tax credit for employment of individuals with developmental disabilities or
3 severe mental illness; and to provide an effective date.
4 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
5 SECTION 1. AMENDMENT. Section 57-38-01.16 of the North Dakota Century Code is
6 amended and reenacted as follows:
7 57-38-01.16. Income tax credit for employment of individuals with developmental
8 disabilities or chronically mentally ill personssevere mental illness. (Effective after the
9 first two taxable years beginning after December 31, 2020)
10 1. A taxpayer filing an income tax return under this chapter may claim a credit against the
11 tax liability imposed under section 57-38-30 or section 57-38-30.3 for a portion of the
12 wages paid to an employee with a developmental disability or a chronically mentally ill
13 employeesevere mental illness.
14 2. The credit allowed under this section equals fivetwenty-five percent of up to six
15 thousand dollars in wages paid during the first twelve months of employmentannually
16 by the taxpayer for each employee with a developmental disability or chronically
17 mentally ill employee of the taxpayersevere mental illness, if the department of health
18 and human services' vocational rehabilitation division determines the individual has a
19 most significant disability, is eligible for services, and requires customized employment
20 or supported employment to obtain competitive integrated employment.
21 3. Only wages actually paid during the taxpayer's taxable year may be considered for
22 purposes of this section. An employee of a subcontractor is considered an employee
23 of the contractor to the extent of any wages paid under the contract.
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 Sixty-eighth
Legislative Assembly
1 4. The total of credits allowed under this section may not exceed fifty percent of the
2 taxpayer's liability under this chapter.
3 5. A taxpayer shall apply, on a form and in the manner prescribed by the department of
4 health and human services' vocational rehabilitation division, for a determination of
5 whether an employee meets the requirements under subsection 2. If an employee
6 meets the requirements, a letter of certification containing the names of the taxpayer
7 and the qualifying employee must be issued to the taxpayer. No more than
8 two hundred employees may be certified as qualifying under this section. Applications
9 must be processed in the order the applications are received.
10 6. A taxpayer claiming a credit under this section shall include a copy of the certification
11 letter received from the department of health and human services' vocational
12 rehabilitation division with the taxpayer's return filed under this chapter for each
13 taxable year the credit is claimed.
14 7. A passthrough entity entitled to the credit under this section must be considered to be
15 the taxpayer for purposes of calculating the credit. The amount of the allowable credit
16 must be determined at the passthrough entity level. The total credit determined at the
17 entity level must be passed through to the partners, shareholders, or members in
18 proportion to their respective interests in the passthrough entity. An individual taxpayer
19 may take the credit passed through under this section against the individual's state
20 income tax liability under section 57-38-30.3.
21 SECTION 2. EFFECTIVE DATE. This Act is effective for taxable years beginning after
22 December 31, 2022.
Page No. 2 23.0828.01000


Statutes affected:
INTRODUCED: 57-38-01.16
Enrollment: 57-38-01.16