Disability Employment Credit

Income Taxpayer-Effective for tax years 2019 and beyond.

An income tax credit shall be allowed for goods and services purchased from a qualified vendor.

QUALIFICATIONS

The taxpayer must make purchases from a qualified vendor.

A qualified vendor must be a certified business pursuant to K.S.A. 75-3740.

Qualified vendors that meet the requirements and would like to apply for certification must complete the certification form and submit to Tara.Logan@ks.gov

The Kansas Department of Commerce shall annually certify that expenditures for goods and services purchased by a taxpayer were made from a qualified vendor.

Credit Amount

The credit is equal to 15% of the amount for approved expenditures of goods and services purchased and shall be deducted from the taxpayer’s income tax liability for the tax year in which the expenditures were made by the taxpayer.

Limitation of Credit

The amount of credit awarded for each taxpayer shall not exceed $500,000 per qualified vendor per tax year.

In no event shall the total amount of cumulative credits allowed under this section exceed $5,000,000 for tax years 2019 through 2023;

$8,000,000 for years 2024 through 2028; and

$8,000,000 for each consecutive five tax years thereafter starting with tax year 2029.

If the credit exceeds the amount of the tax liability, the excess amount may be carried over to the next succeeding tax year or years until the total amount of the tax credit has been deducted from the tax liability, except that no tax credit shall be carried over for deduction after the fourth tax year succeeding the tax year in which the expenditures were incurred.

Procedures to Claim the Credit

You may download Schedule K-44 to claim the Disability Employment tax credit.

Back to Tax Credits page.

Disability Employment Credit Definitions

Qualified Vendor means:

Any business that qualifies as a certified business pursuant to K.S.A. 75-3740, and amendments thereto, and is a not-for-profit business that is a sole proprietorship, partnership, association or corporation domiciled in Kansas, or any corporation, even if a wholly owned subsidiary of a foreign corporation, that:
1. Does business primarily in Kansas or substantially all of its production in Kansas;
2. employs at least 30% of its employees in an integrated setting who are individuals with disabilities and reside in Kansas;
3. offers to contribute at least 75% of the premium cost for individual health insurance coverage for each eligible employee. The department of administration shall require a certification of these facts; and
4. does not employ individuals under a certificate issued by the United States secretary of labor under 29 U.S.C. § 214(c);
qualifies as a qualified vendor pursuant to K.S.A. 75-3317, and amendments thereto,and also:
1. Employs at least 30% of its employees in an integrated setting;
2. offers to contribute at least 75% of the premium cost for individual health insurance coverage for each eligible employee or offers a qualified company-sponsored insurance plan under the affordable care act or pays the required subsidy to the internal revenue service for employees who purchase insurance through the open market, if a companysponsored plan is not offered. If any such company is not covered under the affordable care act and does not offer a company-sponsored insurance plan, such company must offer assistance to the employee to cover at least 75% of their health insurance costs through a health savings account or other legal and appropriate methodology; and
3. does not employ individuals under a certificate issued by the United States secretary of labor under 29 U.S.C. § 214(c); or
a division within a Kansas not-for-profit organization that:
1. Does business primarily in Kansas or substantially all of its production in Kansas;
2. within such division, employs in an integrated setting at least 30% of its employees who are individuals with disabilities and reside in Kansas;
3. within such division, offers to contribute at least 75% of the premium cost for individual health insurance coverage for each eligible employee or offers a qualified companysponsored insurance plan under the affordable care act or pays the required subsidy to the internal revenue service for employees who purchase insurance through the open market, if a company-sponsored plan is not offered. If any such company is not covered under the affordable care act and does not offer a company-sponsored insurance plan, such company must offer assistance to the employee to cover at least 75% of their health insurance costs through a health savings account or other legal and appropriate methodology; and
4. does not employ individuals under a certificate issued by the United States secretary of labor under 29 U.S.C. § 214(c) and the Kansas not-for profit organization, including any other division within the Kansas not-for-profit organization, does not employ individuals under such a certificate.

Individuals with disabilities or individual with a disability means any individual who:

Is certified by the Kansas department for aging and disability services or by the Kansas department for children and families, which administers the rehabilitation services program or by a healthcare provider determined by the secretary of revenue, that shall include, but is not limited to, medical doctors, doctors of osteopathy, physician assistants, nurse practitioners, physical therapists, occupational therapists and optometrists who can substantiate an individual as having a physical or mental impairment that constitutes a substantial barrier to employment; and
1. is receiving services, has received services or is eligible to receive services under a home and community based services program, as defined by K.S.A. 39-7,100, and amendments thereto;
2. is employed by a charitable organization domiciled in the state of Kansas and exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986, as amended; or
3. is an individual with a disability pursuant to the disability standards established by the social security administration as determined by the Kansas disability determination services under the Kansas department for children and families.