Federal and State Tax Incentives For Hiring Individuals with Disabilities

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1 Federal and State Tax Incentives For Hiring Individuals with Disabilities Architectural and transportation barrier removal expenses: The IRS allows a deduction up to $15,000 per year for "qualified architectural and transportation barrier removal expenses." Expenditures to make a facility or public transportation vehicle owned or leased in connection with a trade or business more accessible to, and usable by, individuals who are handicapped or elderly are eligible for the deduction. The definition of a "handicapped individual" is similar to the ADA definition of an "individual with a disability." To be eligible for this deduction, modifications must meet the requirements of standards established by IRS regulations implementing section 190. Targeted job tax credit: Employers are eligible to receive a tax credit up to 40 percent of the first $6,000 of first-year wages of a new employee with a disability who is referred by state or local vocational rehabilitation agencies, a State Commission on the Blind, or the U.S. Department of Veterans Affairs, and certified by a State Employment Service. There is no credit after the first year of employment. For an employer to qualify for the credit, a worker must have been employed for at least 90 days or have completed at least 120 hours of work for the employer. The Work Opportunity Tax Credit (WOTC) The Work Opportunity Tax Credit (WOTC) Program is a winning opportunity for businesses to solve key workforce shortages and reduce hiring costs by using the credit for new employees with disabilities. When an employer fills a vacant position with a WOTC-certified employee, the employer can become qualified to claim a federal income tax credit for a portion of the new employee s salary. Individuals eligible for certification include job seekers with disabilities who are using vocational rehabilitation services, persons receiving Supplemental Security Income (SSI) benefits within 60 days of hire, ticket holders referred by Employment Networks, and disabled veterans. For hires of vocational rehabilitation customers and SSI recipients, the tax credit applies to the first $6,000 in wages paid to each new hire for the first year of employment, with a maximum tax credit of up to $2,400 per new hire. For a hire of a disabled veteran, those figures are doubled. Partial tax credits are also available. Note: The Work Opportunity Tax Credit Categories AFDC Recipient, Ex-Felon, Designated Community Resident, Vocational Rehab Referral, Summer Youth, SNAP Recipient, SSI Recipient, and Long-term Family Assistance Recipient are currently in hiatus effective January 1, The Disconnected Youth Category is continuing its hiatus that was effective January 1, 2011.

2 ADA small business tax Credit: Businesses with 30 or fewer employees or $1,000,000 or less per year in total revenue can receive a tax credit for the cost of accommodations provided to an employee (or customer) with a disability. This credit covers 50% of eligible expenditures up to $10,000 (maximum credit per year of $5000). For additional information, contact the Internal Revenue Service. Welfare to Work Tax Credit: If a person with a disability is a recipient of Temporary Aid to Needy Families (TANF) at the time of hire; the employer can receive a federal tax credit for up $8,500 per individual hired. Hiring Incentives to Restore Employment (HIRE) Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2012) may qualify for a 6.2% payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after the date of enactment. This reduced tax withholding will have no effect on the employee s future Social Security benefits, and employers would still need to withhold the employee s 6.2-percent share of Social Security taxes, as well as income taxes. The employer and employee s shares of Medicare taxes would also still apply to these wages. In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2012 income tax returns.

3 Employment Transition Center I am working on my own. That means people trust me. Nathan began working at the Mohegan Sun casino in He works an average of 30 hours per week, with 3 hours per week of support from a job coach. Originally part of group supported employment, Nathan was hired independently when this supervisors recognized his outstanding work ethic and positive attitude. Though Nathan still enjoys buffing the arena floor after entertainment events, he is no longer limited to just arena maintenance. He now completes many additional tasks, including hard surface cleaning, power washing, truck unloads and stocking. His job coach helps Nathan reach his individual goals to advance on the job and facilitates communication between him and his supervisors. Herbie works at McDonald s on Long Hill Road in Groton. He is a dedicated employee who takes his job and duties seriously. He works 18 hours a week, Tuesday through Friday. When he began at McDonalds three years ago, his main duties focused on cleaning the bathrooms and the kitchen. He set a goal for himself to take charge of maintaining the lobby area. With the help of his job coach, who provides four hours of support each week, Herbie is now responsible for stocking the condiment station, trash removal, and maintaining the cleanliness of the dining room. His job coach also helps facilitate conversation with his supervisor, track Herbie s work schedule, and provide any additional training Herbie needs to reach new goals. Maintaining the lobby at McDonald s keeps me busy and makes the day go by fast! The Thomas J. Sullivan Employment Transition Center 52 Sacred Heart Drive Groton, CT info@thearcnlc.org

4 This 3-member crew is employed by C W Resources, a sub-contractor of the U.S. Sub Base. With the job coach, who works side by side with the crew, this tight knit team performs maintenance tasks including mopping, vacuuming, cleaning bathrooms and other hard surface cleaning. The job coach also provides ongoing training on safety skills and use and safe handling of chemicals. Each crew member has an individual plan in which they set goals for themselves around safety and learning new tasks. The job coach communicates with the supervisor and provides additional skill-based training for the crew when a new responsibility is added to their workload. Though they work as a team, each member of the crew brings individual strengths and abilities to the job to get the tasks completed efficiently and professionally. The work the cleaning crew does is fantastic! They are cheerful and willing to do the job right. I would love to have them here more often. Ron Johnson, Maintenance Supervisor, Fleet Motor Services The Employment Transition Center lawn crew is a microbusiness in a field of high demand. The six member crew, plus a working job coach, are trained to use the zeroturn mower as well as push mowers. They can tackle a multitude of outdoor maintenance projects including weeding, pruning shrubs, mulching, debris removal, lawn mowing, grass patching, and spring and fall cleanup. The lawn crew accepts one-time as well as weekly jobs. The crew works five hours a day, four days a week. The Arc is exploring the expansion to two teams to meet the demand of interested trainees and community need. The crew of five does a great job. The job coach is awesome and right on top of training needs to perform new tasks. I have a great relationship with the job coach and we are completely satisfied with the crew s work. Diane Bean, Mohegan Sun Casino The Thomas J. Sullivan Employment Transition Center 52 Sacred Heart Drive Groton, CT info@thearcnlc.org

5 Partner with The Arc New London County to Hire Qualified Employees Today! Straight Forward, no hidden costs employment packages. The Arc tailors an employment package to meet the specific needs of your company. Working Job Coach. Each team is paired with a working job coach to provide onsite training, support and employee management. Tax Credits and Incentives. Let the Arc assist in completing paperwork for tax credits and incentives for which you may be eligible by hiring people with intellectual and developmental disabilities. No Contract. Hire only the number of employees you need, when you need them. No Overhead. The Arc takes care of Worker s Compensation, Payroll Services, training costs and transportation for employees Free Advertisement. The Arc will mention your company in newsletters, annual reports, social media, etc. For more information on how your business can benefit from hiring employees with intellectual and developmental disabilities, Contact: Jon Maderia, Director of Employment T: jmaderia@thearcnlc.org

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