In an effort to promote inclusive employment practices, Florida has introduced a new tax incentive program for businesses that employ individuals with unique abilities. This program, effective for taxable years beginning in 2024, 2025, and 2026, offers a tax credit against the Florida corporate income/franchise tax. Here’s what you need to know about this initiative, including how it works, who qualifies, and how to apply.

What is the Individuals with Unique Abilities Tax Credit Program?

The Individuals with Unique Abilities Tax Credit Program is designed to encourage Florida businesses to hire employees with physical or intellectual impairments. Under this program, businesses that employ qualified individuals can earn a tax credit against their Florida corporate income/franchise tax. The credit amount is calculated based on the number of hours worked by the qualified employee.

Key Features of the Tax Credit

• Credit Amount: Businesses can receive a tax credit of $1 for each hour a qualified employee works during the taxable year, up to a maximum of 1,000 hours. This translates to a maximum annual credit of $10,000 per business.
• Carry Forward: If a business does not use the full amount of its tax credit in a given year, it can carry forward the unused portion for up to five taxable years.
• Credit Cap: The total amount of tax credits available is capped at $5 million for each state fiscal year, covering 2024-25, 2025-26, and 2026-27. This cap ensures that the credits are distributed on a first-come, first-served basis.

Who is Eligible?

Qualified Taxpayer

A “qualified taxpayer” is defined as a business located in Florida that employs at least one qualified employee. To benefit from this program, the business must be engaged in the Florida corporate income/franchise tax system.

Qualified Employee

A “qualified employee” is someone who:

• Has a physical or intellectual impairment that substantially limits one or more major life activities.
• Has a history or record of such an impairment.
• Is perceived by others as having such an impairment.

Additionally, the employee must have been employed for at least six months by the qualified taxpayer to be eligible for the credit.

Application Process

To claim the tax credit, businesses must follow a specific application process. Here’s a step-by-step guide:

1. Application Submission: Starting July 1, 2024, businesses can submit their tax credit applications to the Florida Department of Revenue (DOR). Applications must be approved by the DOR before the credit can be claimed on the Florida Corporate Income/Franchise Tax Return (Form F-1120).
2. Online Application: The most efficient way to apply for the tax credit is through the DOR’s single tax credit webpage. This online portal allows businesses to:
   • Create a secure online account.
   • Complete and submit the application, receiving a confirmation number with the submission date and time.
   • View the status of applications from their account dashboard.
   • Apply for multiple tax credits through a single platform.
3. Paper Applications: While taxpayers who are required to file and pay electronically must apply online, those who are not obligated to do so are encouraged to use the online system but can also submit a paper application using Form F-11992, titled “Florida Individuals with Unique Abilities Tax Credit Program – Application for Tax Credit.”
4. Approval and Credit Claiming: The Department will approve applications on a first-come, first-served basis. Once approved, businesses can claim the tax credit on their annual tax return.

Benefits of the Program

The Individuals with Unique Abilities Tax Credit Program offers several benefits:

• Encourages Inclusive Hiring: By providing a financial incentive, the program encourages businesses to hire individuals with unique abilities, promoting a more inclusive workforce.
• Financial Savings: The tax credit can significantly reduce a business’s tax liability, providing financial relief and supporting business growth.
• Positive Community Impact: Employing individuals with unique abilities can have a positive impact on the community, enhancing corporate social responsibility and improving workplace diversity.

The introduction of the Individuals with Unique Abilities Tax Credit Program represents a meaningful step toward fostering a more inclusive job market in Florida. By offering financial incentives to businesses that hire individuals with physical or intellectual impairments, this program not only supports those who face significant employment barriers but also benefits employers through tax savings and a more diverse workforce.

Businesses interested in participating should prepare to apply for the credit starting July 1, 2024. Ensuring compliance with application procedures and understanding eligibility requirements will be crucial for making the most of this opportunity.