Thomas John DLC Manglona
GOVERNOR Arnold I. Palacios on Monday signed into law House Bill 23-35, which provides tax incentives to employers who hire individuals with special needs.
Authored by Rep. Thomas John DLC Manglona, H.B. 23-35 is now Public Law 23-15.
It provides for a long-term disability employment tax credit through which any employer who hires individuals with disability may qualify for a non-refundable tax credit of 40% of the wages paid to the worker against the tax imposed on the employer’s gross revenue.
The individual with disability must be continuously employed by the employer for nine months in order for the employer to qualify for tax credit. The worker may be employed part-time or full-time.
The new law caps the tax credit at $4,000 for the tax year it is claimed, inclusive of all employees who are eligible. The cap shall increase by $1,000 for each tax year thereafter, to a maximum of $10,000.
The employer shall also “take affirmative steps to ensure that the employment does not detrimentally affect a worker’s eligibility for public assistance programs such as the Nutrition Assistance Program.”
To obtain the tax credit, the employer must provide the Division of Revenue and Taxation a properly documented compliance letter for each individual issued by any medically acceptable clinic and/or laboratory.
Moreover, employers must annually certify compliance with all provisions of the new law to the CNMI Department of Labor secretary.
According to the new law, “Many individuals with disabilities in the CNMI are eager and determined to be part of the workforce. Many of these individuals are not only highly educated but also highly capable to establish themselves and be positive contributors to our society. It would be appropriate to provide incentives for employers to hire these individuals.”
