Arizona bill provides tax credit for employing people with mental illness

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A bill that offers tax credits to business owners who employ at least one person with a mental illness was passed by the Arizona State Senate and is currently being held in the House of Appropriations.

Senate Bill 1142 establishes the severely mentally ill employment credit deductible from personal and corporate income tax for tax years 2022 to 2024.


READ ALSO: How to deal with mental health at work


The bill sets the credit amount at $ 2 for each hour worked by a critically mentally ill employee during the calendar year. It must not exceed $ 20,000 per taxpayer and sets a total limit of $ 1 million for credits claimed by individuals and corporations. The bill sets out additional requirements for credit.

A two-page amendment to the bill removes the requirement that the taxpayer must employ 100 or fewer employees and removes the sunsetting of the credit in the 2024 tax year. To be eligible for the credit, the employer does not should not be a regional behavioral health authority. or a contractual service provider for them, the mentally ill employee must be a resident of Arizona and the employee must have been unemployed for at least six months.

In the event that the credit exceeds the amount of taxes owed for a taxpayer in a given year, the taxpayer is allowed to defer the tax credit for up to five calendar years.

The bill received broad support from the community. Mother and Bill advocate Deborah Geesling shared her story about her son who battled schizophrenia.

“He tried several state employment programs, but found them inflexible and meaningless,” Geesling said. “No one likes to sit all day, put small screws away in a warehouse, or scratch gum on a sidewalk.”

Geesling said her son finally got a job thanks to a friend serving at local restaurant Fire and Brimstone and that he hasn’t missed a day since he started working three years ago.

“It’s about more opportunities and choices,” Geesling said. “Business owners who are willing to invest their resources in training someone (mental illness) should be allowed to take out a small loan. “

The bill was also rejected by senators and representatives. Senator Juan Mendez voted against because he does not match his beliefs about how the government should discharge its responsibilities.

“I wish the state could do more instead of just leaving it to people who want to take advantage of a tax cut,” Mendez said.

House member Randy Friese also said the bill needed revision. He asked to consider a grant program instead of a tax credit to gain broader bipartisan support.

“A tax credit leads to decreased income, a subsidy program requires credits, but it’s still a net zero difference,” said Friese.

Friese said he understands the concern of identifying an employee as a qualified person with mental illness, but if he can find a way to identify himself, a subsidy program can work.

The bill’s sponsor, Senator Nancy Barto, calls it “the intentional next step in recovery for many people with severe mental illness in Arizona.”

She said the state’s public mental health system has been down for decades, which is one reason a large percentage of people with mental illnesses are homeless, hospitalized dozens of times a year. year and eventually imprisoned.

Barto said most business owners need some initial help with the risk and cost of employing someone with mental illness or high needs, which involves a longer training period. The Department of Economic Security pays $ 35,000 a year to prepare and train individuals, but effectively structured tax incentives can do more for less.

“Nothing builds self-esteem like learning useful skills, interacting with other members of the community and the ability to form lasting friendships,” Barto said. “Employment for people with (mental illness) can do all three. “


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