Hiring Disabled Workers: Get Tax Credits to Support Small Businesses

Are you a small business owner like me? Well, I’ve got some great news for you. Did you know that you can get tax credits for hiring disabled workers? Yep, you heard that right!

Let me break it down for you. The government wants to support businesses that choose to hire individuals with disabilities, so they offer tax credits as an incentive. These credits help offset the costs associated with supporting disabled employees in the workplace.

Now, you might be wondering, How exactly does this work? Well, it’s pretty simple, actually. When you hire a disabled worker, you can claim a tax credit based on a percentage of the wages paid to that employee. This means that you can reduce the amount of taxes you owe to the government, which can be a big advantage for your small business.

But wait, there’s more! The amount of tax credit you can claim depends on a few factors, such as the type of disability and the number of hours the employee works. The government has specific criteria in place to determine the eligibility of both the business and the employee.

It’s important to note that these tax credits are not only beneficial for your business but also for people with disabilities. By offering them job opportunities, you are empowering them to lead independent and fulfilling lives. It’s a win-win situation!

So, if you’re a small business owner looking to make a positive impact while also enjoying some financial benefits, I highly recommend considering hiring disabled workers. The government has put these tax credits in place to support businesses like ours, and I believe it’s an opportunity we shouldn’t miss.

Remember, it’s not just about the numbers. When we give people with disabilities a chance, we create a more inclusive and diverse workforce. And that’s something we can all be proud of!

So, what are you waiting for? Start exploring the possibilities and see how hiring disabled workers can benefit your small business. Trust me, you won’t regret it!

I want to talk to you about the importance of small businesses in our economy. Did you know that small businesses create 65 percent of new net jobs? That’s according to the Small Business Administration.

But running a small business isn’t easy. We face constant financial pressure and increasing government regulations. So how can we ensure continued growth? Well, one way is by hiring people with disabilities.

Now, you might be wondering how hiring people with disabilities can help. Let me tell you. The Federal Government offers three types of tax credits to help businesses like ours. These tax credits are designed to help us capitalize on the value and talent that people with disabilities can bring to our teams.

The first tax credit is called the Disabled Access Credit. This credit is available to eligible small businesses that incur expenses to provide access to people with disabilities. It can help us cover the costs of making our workplaces more accessible.

The second tax credit is the Architectural Barrier Removal Tax Deduction. This deduction allows us to write off the expenses we incur to remove physical barriers in our workplace. By removing these barriers, we can create a more inclusive environment for everyone.

The third tax credit is the Work Opportunity Tax Credit. This credit is available to businesses that hire individuals from certain target groups, including people with disabilities. It provides financial incentives to employers who give these individuals a chance to prove their skills and contribute to the workforce.

Now, here’s an important note for you. This article has been specially reviewed and updated for the 2019/2020 tax season.

So, to sum it all up:

If we hire people with disabilities, we can:

Did you know that there’s a special tax credit called the Disabled Access Credit? It’s pretty cool because it helps small businesses make their places accessible for people with disabilities. I want to tell you all about it!

Who can get the credit?

Well, it’s for small businesses that earned up to $1 million or had 30 or fewer full-time employees last year. It’s all based on the rules in the Internal Revenue Code, Section 44. So if you fit that criteria, you’re good to go!

How much is the credit?

The credit is actually 50 percent of your expenses over $250. So let’s say you spent $500 on making your business accessible, you would get a credit for $125. Now, the maximum credit you can get is $5,000, but that’s only if your expenses were over $10,250. Oh, and remember, you don’t get a credit for the first $250 you spent. It’s all explained in the IRS Form 8826 (PDF) that you use to claim the credit. Pretty neat, huh?

What can the credit be used for?

Well, the credit can be used for all sorts of things that help people with disabilities. For example:

• If you need sign language interpreters for your hearing-impaired customers or employees, you can use the credit for that.
• If you have employees with visual impairments who need readers, you can use the credit for that too.
• And if you need to buy special equipment or modify your existing equipment to make it easier for people with disabilities to use, you can use the credit for that as well.

I can produce print materials in different formats to make them accessible to everyone. This includes Braille, audio tapes, and large print.

I can also help remove any barriers in buildings or vehicles that may prevent people with disabilities from accessing or using a business.

There is also a tax deduction called the Architectural Barrier Removal Tax Deduction. It encourages businesses of any size to remove barriers that make it difficult for people with disabilities to move around. By complying with this deduction, businesses can qualify for a $15,000 tax deduction each year.

Small businesses can also take advantage of the Disabled Access Credit, as long as the expenses qualify under both Section 44 and Section 190 of the IRS tax code.

Let me give you an example. Imagine you’re a small business and you spent $20,000 on making your place accessible. Guess what? You can actually get some money back! You can take a tax credit of $5000 and a deduction of $15,000. The deduction is like a discount – it’s the difference between the total cost and the amount you get from the credit. Cool, right?

Now, let me tell you what kinds of changes you can make to get that credit and deduction:

• First, you can create accessible parking spaces, ramps, and curb cuts. That way, people in wheelchairs can easily get in and out of your place.
• You can also make things like telephones, water fountains, and restrooms accessible to people using wheelchairs. It’s important that everyone can use these things, right?
• Another thing you can do is make walkways and paths of travel accessible. This means having doorways that are 32 inches wide when open at a 90-degree angle, and hallways or sidewalks that are 36-48 inches wide and free of any obstructions. That way, everyone can move around easily and safely.
• Lastly, you can provide accessible entrances to your building. This could be things like automatic doors or making sure the doors are the right weight. It’s all about making it easy for everyone to come inside.

Did you know that businesses have certain limitations on the tax deduction they can claim? Yep, it’s true! Expenses for new construction, complete renovation, or the normal replacement of depreciable equipment can’t be included in that deduction. And here’s another thing – if another tax credit is already covering the same cost, businesses can’t double dip and claim the deduction for it.

Now, let me tell you about the Work Opportunity Tax Credit!

It’s the third tax advantage that all businesses can take advantage of. This credit gives employers the opportunity to claim a federal income tax credit for a portion of the new employee’s salary if they hire someone who is WOTC-certified and fills a vacant position. Pretty neat, right?

Now, who exactly is eligible for certification? Well, we’ve got job seekers with disabilities who have been referred by a vocational rehabilitation service or who have received Social Security Income (SSI) benefits within 60 days before they were hired. They are the ones who can get that certification.

The tax credit is for the first $6,000 I pay to each new employee in their first year of work. I can receive up to $2,400 in tax credits for each person.

To take advantage of this tax credit, I need to fill out and submit two forms. The first is IRS Form 8850 (PDF), and the second is the Department of Labor’s Employment and Training Administration (ETA) Form 9061 (PDF).

Extending the WOTC for Hiring Veterans with Disabilities

If I hire a military veteran with a service-connected disability through the Veterans Opportunity to Work (VOW) to Hire Heroes Act of 2011, I may qualify for a version of the WOTC.

This extension offers up to $4,800 for the first year of wages for veterans with service-connected disabilities hired within a year of leaving the armed forces. If they have been unemployed for at least six months, I may receive a refund of up to $9,600 for their first-year wages.

Hey there, check out these additional resources!

• The IRS offers tax benefits for businesses who employ individuals with disabilities.
• The Office of Disability Employment Policy (ODEP) provides information on tax incentives for businesses that make their facilities accessible.
• The Equal Employment Opportunity Commission (EEOC) has facts about disability-related tax provisions.
• The Veterans Administration (VA) offers opportunities for veterans to work.
• The ODEP also provides a small business disability inclusion fact sheet.
• The Small Business Administration (SBA) has resources on hiring people with disabilities.
• Ask EARN has an information page on tax incentives for businesses.
• Think Beyond the Label helps businesses make sense of tax credits for hiring individuals with disabilities.
• And if you want an easy way to calculate the approximate amount of tax credits and deductions for hiring persons with disabilities, check out the Hire Gauge online calculator from Think Beyond the Label.