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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1025
Introduced by Bostar, 29.
Read first time January 05, 2024
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-2715.07, 77-2717, and 77-2734.03, Revised Statutes Supplement,
3 2023; to adopt the Individuals with Intellectual and Developmental
4 Disabilities Support Act; to provide tax credits; to harmonize
5 provisions; and to repeal the original sections.
6 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 9 of this act shall be known and may be
2 cited as the Individuals with Intellectual and Developmental Disabilities
3 Support Act.
4 Sec. 2. For purposes of the Individuals with Intellectual and
5 Developmental Disabilities Support Act:
6 (1) Comprehensive developmental disabilities waiver means a medicaid
7 home and community-based services waiver under the authority of section
8 1915(c) of the federal Social Security Act;
9 (2) Department means the Department of Revenue; and
10 (3) Direct support professional means any individual who is employed
11 in this state and provides direct care support or any other form of
12 treatment, services, or care for individuals with intellectual and
13 developmental disabilities.
14 Sec. 3. (1) For taxable years beginning or deemed to begin on or
15 after January 1, 2025, under the Internal Revenue Code of 1986, as
16 amended, any employer that employs one or more direct support
17 professionals during the taxable year shall be eligible to receive a
18 credit against the income tax imposed by the Nebraska Revenue Act of
19 1967.
20 (2) The tax credit shall be in an amount equal to five hundred
21 dollars multiplied by the number of direct support professionals who:
22 (a) Are employed by such employer for at least six months during the
23 taxable year; and
24 (b) Work at least five hundred hours for such employer during the
25 taxable year.
26 (3) The tax credit provided in this section shall be a nonrefundable
27 tax credit.
28 (4) An employer shall apply for the credit provided in this section
29 by submitting an application to the department on a form prescribed by
30 the department. Subject to subsection (5) of this section, if the
31 department determines that the employer qualifies for tax credits under
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1 this section, the department shall approve the application and certify
2 the amount of credits approved to the employer.
3 (5) The department shall consider applications in the order in which
4 they are received and may approve tax credits under this section in any
5 year until the aggregate limit allowed under section 7 of this act has
6 been reached.
7 (6) An employer shall claim any tax credits granted under this
8 section by attaching the tax credit certification received from the
9 department under subsection (4) of this section to the employer's tax
10 return.
11 Sec. 4. (1) For taxable years beginning or deemed to begin on or
12 after January 1, 2025, under the Internal Revenue Code of 1986, as
13 amended, a direct support professional shall be eligible to receive a
14 credit against the income tax imposed by the Nebraska Revenue Act of 1967
15 if he or she:
16 (a) Is employed as a direct support professional for at least six
17 months during the taxable year; and
18 (b) Works at least five hundred hours as a direct support
19 professional during the taxable year.
20 (2) The tax credit shall be in an amount equal to five hundred
21 dollars.
22 (3) The tax credit provided in this section shall be a refundable
23 tax credit.
24 (4) A direct support professional shall apply for the credit
25 provided in this section by submitting an application to the department
26 on a form prescribed by the department. Subject to subsection (5) of this
27 section, if the department determines that the direct support
28 professional qualifies for tax credits under this section, the department
29 shall approve the application and certify the amount of credits approved
30 to the direct support professional.
31 (5) The department shall consider applications in the order in which
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1 they are received and may approve tax credits under this section in any
2 year until the aggregate limit allowed under section 7 of this act has
3 been reached.
4 (6) A direct support professional shall claim any tax credits
5 granted under this section by attaching the tax credit certification
6 received from the department under subsection (4) of this section to the
7 direct support professional's tax return.
8 Sec. 5. (1) For taxable years beginning or deemed to begin on or
9 after January 1, 2025, under the Internal Revenue Code of 1986, as
10 amended, any employer that employs an individual receiving services
11 pursuant to a comprehensive developmental disabilities waiver shall be
12 eligible to receive a credit against the income tax imposed by the
13 Nebraska Revenue Act of 1967.
14 (2) The tax credit shall be in an amount equal to one thousand
15 dollars multiplied by the number of employees who:
16 (a) Are receiving services pursuant to a comprehensive developmental
17 disabilities waiver;
18 (b) Are employed by such employer for at least six months during the
19 taxable year; and
20 (c) Work at least two hundred hours for such employer during the
21 taxable year.
22 (3) The tax credit provided in this section shall be a nonrefundable
23 tax credit.
24 (4) An employer shall apply for the credit provided in this section
25 by submitting an application to the department on a form prescribed by
26 the department. Subject to subsection (5) of this section, if the
27 department determines that the employer qualifies for tax credits under
28 this section, the department shall approve the application and certify
29 the amount of credits approved to the employer.
30 (5) The department shall consider applications in the order in which
31 they are received and may approve tax credits under this section in any
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1 year until the aggregate limit allowed under section 7 of this act has
2 been reached.
3 (6) An employer shall claim any tax credits granted under this
4 section by attaching the tax credit certification received from the
5 department under subsection (4) of this section to the employer's tax
6 return.
7 Sec. 6. (1) For taxable years beginning or deemed to begin on or
8 after January 1, 2025, under the Internal Revenue Code of 1986, as
9 amended, an employer shall be eligible to receive a credit against the
10 income tax imposed by the Nebraska Revenue Act of 1967 if such employer
11 provides any of the following types of services to an individual pursuant
12 to a comprehensive developmental disabilities waiver:
13 (a) Prevocational;
14 (b) Supported employment – individual;
15 (c) Small group vocational support; or
16 (d) Supported employment – follow along.
17 (2) The tax credit shall be in an amount equal to one thousand
18 dollars multiplied by the number of individuals described in subsection
19 (1) of this section who received the applicable services from the
20 employer during the taxable year.
21 (3) The tax credit provided in this section shall be a nonrefundable
22 tax credit.
23 (4) An employer shall apply for the credit provided in this section
24 by submitting an application to the department on a form prescribed by
25 the department. Subject to subsection (5) of this section, if the
26 department determines that the employer qualifies for tax credits under
27 this section, the department shall approve the application and certify
28 the amount of credits approved to the employer.
29 (5) The department shall consider applications in the order in which
30 they are received and may approve tax credits under this section in any
31 year until the aggregate limit allowed under section 7 of this act has
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1 been reached.
2 (6) An employer shall claim any tax credits granted under this
3 section by attaching the tax credit certification received from the
4 department under subsection (4) of this section to the employer's tax
5 return.
6 Sec. 7. The department may approve tax credits under the
7 Individuals with Intellectual and Developmental Disabilities Support Act
8 each year until the total amount of credits approved for the year reaches
9 two million five hundred thousand dollars.
10 Sec. 8. If any employer receiving a tax credit under the
11 Individuals with Intellectual and Developmental Disabilities Support Act
12 is (1) a partnership, (2) a limited liability company, (3) a corporation
13 having an election in effect under subchapter S of the Internal Revenue
14 Code of 1986, as amended, or (4) an estate or trust, the tax credit may
15 be distributed in the same manner and proportion as the partner, member,
16 shareholder, or beneficiary reports the partnership, limited liability
17 company, subchapter S corporation, estate, or trust income.
18 Sec. 9. The department may adopt and promulgate rules and
19 regulations to carry out the Individuals with Intellectual and
20 Developmental Disabilities Support Act.
21 Sec. 10. Section 77-2715.07, Revised Statutes Supplement, 2023, is
22 amended to read:
23 77-2715.07 (1) There shall be allowed to qualified resident
24 individuals as a nonrefundable credit against the income tax imposed by
25 the Nebraska Revenue Act of 1967:
26 (a) A credit equal to the federal credit allowed under section 22 of
27 the Internal Revenue Code; and
28 (b) A credit for taxes paid to another state as provided in section
29 77-2730.
30 (2) There shall be allowed to qualified resident individuals against
31 the income tax imposed by the Nebraska Revenue Act of 1967:
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1 (a) For returns filed reporting federal adjusted gross incomes of
2 greater than twenty-nine thousand dollars, a nonrefundable credit equal
3 to twenty-five percent of the federal credit allowed under section 21 of
4 the Internal Revenue Code of 1986, as amended, except that for taxable
5 years beginning or deemed to begin on or after January 1, 2015, such
6 nonrefundable credit shall be allowed only if the individual would have
7 received the federal credit allowed under section 21 of the code after
8 adding back in any carryforward of a net operating loss that was deducted
9 pursuant to such section in determining eligibility for the federal
10 credit;
11 (b) For returns filed reporting federal adjusted gross income of
12 twenty-nine thousand dollars or less, a refundable credit equal to a
13 percentage of the federal credit allowable under section 21 of the
14 Internal Revenue Code of 1986, as amended, whether or not the federal
15 credit was limited by the federal tax liability. The percentage of the
16 federal credit shall be one hundred percent for incomes not greater than
17 twenty-two thousand dollars, and the percentage shall be reduced by ten
18 percent for each one thousand dollars, or fraction thereof, by which the
19 reported federal adjusted gross income exceeds twenty-two thousand
20 dollars, except that for taxable years beginning or deemed to begin on or
21 after January 1, 2015, such refundable credit shall be allowed only if
22 the individual would have received the federal credit allowed under
23 section 21 of the code after adding back in any carryforward of a net
24 operating loss that was deducted pursuant to such section in determining
25 eligibility for the federal credit;
26 (c) A refundable credit as provided in section 77-5209.01 for
27 individuals who qualify for an income tax credit as a qualified beginning
28 farmer or livestock producer under the Beginning Farmer Tax Credit Act
29 for all taxable years beginning or deemed to begin on or after January 1,
30 2006, under the Internal Revenue Code of 1986, as amended;
31 (d) A refundable credit for individuals who qualify for an income
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1 tax credit under the Angel Investment Tax Credit Act, the Nebraska
2 Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research
3 and Development Act, or the Volunteer Emergency Responders Incentive Act;
4 and
5 (e) A refundable credit equal to ten percent of the federal credit
6 allowed under section 32 of the Internal Revenue Code of 1986, as
7 amended, except that for taxable years beginning or deemed to begin on or
8 after January 1, 2015, such refundable credit shall be allowed only if
9 the individual would have received the federal credit allowed under
10 section 32 of the code after adding back in any carryforward of a net
11 operating loss that was deducted pursuant to such section in determining
12 eligibility for the federal credit.
13 (3) There shall be allowed to all individuals as a nonrefundable
14 credit against the income tax imposed by the Nebraska Revenue Act of
15 1967:
16 (a) A credit for personal exemptions allowed under section
17 77-2716.01;
18 (b) A credit for contributions to certified community betterment
19 programs as provided in the Community Development Assistance Act. Each
20 partner, each shareholder of an electing subchapter S corporation, each
21 beneficiary of an estate or trust, or each member of a limited liability
22 company shall report his or her share of the credit in the same manner
23 and proportion as he or she reports the partnership, subchapter S
24 corporation, estate, trust, or limited liability company income;
25 (c) A credit for investment in a biodiesel facility as provided in
26 section 77-27,236;
27 (d) A credit as provided in the New Markets Job Growth Investment
28 Act;
29 (e) A credit as provided in the Nebraska Job Creation and Mainstreet
30 Revitalization Act;
31 (f) A credit to employers as provided in sections 77-27,238 and
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1 77-27,240;
2 (g) A credit as provided in the Affordable Housing Tax Credit Act;
3 (h) A credit to grocery store retailers, restaurants, and
4 agricultural producers as provided in section 77-27,241; and
5 (i) A credit as provided in the Opportunity Scholarships Act.
6 (4) There shall be allowed as a credit against the income tax
7 imposed by the Nebraska Revenue Act of 1967:
8 (a) A credit to all resident estates and trusts for taxes paid to