The Kansas Targeted Employment Act is enacted to incentivize employers to employ people with developmental disabilities in Kansas. For tax years 2022 through 2027, there will be a credit allowed against income, privilege, or premium tax liabilities imposed upon a taxpayer that qualifies as a targeted employment business or taxpayer outsourcing work to a targeted employment business for every hour that an eligible individual is employed in a calendar year in a targeted employment business and receives earned income as compensation. The credit only applies to wages for hours worked and not for any compensation for paid leave and is equal to 50% of the wages paid to the eligible individual on an hourly basis, up to a maximum credit of $7.50 per hour.
The credit is non-refundable, cannot be carried forward, and can only be used once each taxable year against tax liability imposed by only one of the income, privilege, or premium taxes. The maximum of all credits allowed each year will be $5 million. “Earned income” means compensation paid to a Kansas employee for competitive integrated employment that is equal to or greater than the minimum wage and is performed in a competitive integrated setting. “Targeted employment business” means those employers employing eligible individuals in competitive integrated employment in a competitive integrated setting and who are authorized to do business in Kansas. “Targeted employment business” does not include a community service provider. These provisions expire on January 1, 2028, except those credits earned in tax year 2027 may be awarded by the Secretary of Revenue.
Source: Thomson Reuters