Federal incentives are discussed on this page. They are:

Work Opportunity Tax Credit (WOTC)

Earn up to a $2,400 tax credit for each new qualified hire.

Disabled Tax Credit

Costs associated with a small business (<30 employees) complying with the ADA can be taken as a tax credit. The formula is 50% of the amount over the first $250 spent up to $5125 per year.

Architectural Transportation Barrier Removal Tax Deduction

Up to $15,000 per year deduction for making its premises more accessible to people with disabilities and the elderly.

Additional Federal Incentives Individuals With Disabilities May Qualify for:

Financial incentives are available for modifying an existing home.

Impairment and Related Work Expenses

If you have a physical or mental disability that limits your ability to function as an employee, you may be able to deduct some of your work expenses related to your impairment.

Medical Expenditures

In addition to some home modifications you may be able to deduct the cost of certain educational services and equipment as medical expenses as long as these expenses are made to alleviate your physical or mental condition.

Section 508 Information & Electronic Technology (E&IT) Accessibility Requirements

In complying to the 1998 Amendments to the Rehabilitation Act, businesses who develop and sell qualifying E&IT to the Federal Government must address these usability requirements. Businesses that fully and clearly address usability standards on their components may (according to the GSA procurement matrix used to evaluate competitive bids) have an advantage over less accessible competitors.

Become an Employer Network (EN) to participate in the Social Security Administrations Ticket to Work Program.

Earn up to $17,000 for hiring and accommodating a person with a disability who holds a Ticket to Work.

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Work Opportunity Tax Credit (WOTC)

WHAT NEW HIRES CAN QUALIFY EMPLOYERS FOR WOTC?

• A member of a family that is receiving or recently received Temporary Assistance to Needy Families (TANF) or Aid to Families with Dependent Children (AFDC),
• An 18-24 year old member of a family that is receiving or recently received Food Stamps ,
• An 18-24 year old resident of one of the Federally designated Empowerment Zones (EZs), Enterprise Communities (ECs), or Renewal Communities (RCs) ,
• A 16-17 year old EZ/EC or RC resident hired between May 1 and September 15 as a Summer Youth Employee,
• A veteran who is a member of a family that is receiving or recently received Food Stamps ,
• A disabled person who completed or is completing rehabilitative services from a State or the U.S. Department of Veterans Affairs ,
• An ex-felon who is a member of a low income family,
• A recipient of Supplemental Security Income (SSI) benefits, and/or
• The New York Liberty Zone Business Employee (requires no certification).

HOW CAN EMPLOYERS PARTICIPATE IN THE WOTC?

To receive certification that a new employee qualifies the employer for this tax credit, the employer must:

• Complete the one page IRS Form 8850 by the day the job offer is made.

• Complete either the one page ETA Form 9061 or Form 9062

• If the new employee has already been conditionally certified as belonging to a WOTC target group, complete the bottom part of ETA Form 9062 (and sign and date it), that he or she has been given by a State Employment Security Agency or participating agency, e.g., a Job Corps center.
• If the new employee has not been conditionally certified, the employer and/or the new employee must fill out and complete, sign and date ETA Form 9061
• Use Form 5884 to claim the Work Opportunity Credit for qualified first-year wages you paid to or incurred for targeted group employees during the tax year.

• Mail the signed IRS and ETA forms to the employer's State Workforce Agency. In Pennsylvania this would go to:

If not in PA, contact your local Labor & Industry office to obtain a mailing address.

• The IRS 8850 form must be mailed within 28 days of the employee's employment-start date.

 

Form 8850 - Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits

 

ETA 9061- Individual Characteristics Form Work Opportunity and Welfare-to-Work Tax Credits

 

Form 5884 - Form 5884 - To Claim Work Opportunity Credit

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Disabled Access Tax Credit

(Title 26, IRS Code, Section 44). This tax credit is available to "eligible small businesses" in the amount of 50 percent of "eligible access expenditures" that exceed $250, but do not exceed $10,250 for a taxable year. A business may take the credit each year that it makes an eligible access expenditure.

Eligible small businesses are those businesses with either $1 million or less in gross receipts for the preceding tax year; or 30 or fewer full time employees during the preceding tax year.

Eligible access expenditures are amounts paid or incurred by an eligible small business for the purpose of enabling the business to comply with the applicable requirements of the ADA. These include amounts paid or incurred to:

• remove architectural, communication, physical, or transportation barriers that prevent a business from being accessible to, or usable by, individuals with disabilities,
• provide qualified readers, taped texts, and other effective methods of making materials accessible to people with visual impairments,
• provide qualified interpreters or other effective methods of making orally delivered materials available to individuals with hearing impairments,
• acquire or modify equipment or devices for individuals with disabilities, or
• provide other similar services, modifications, materials, or equipment.

Expenditures that are not necessary to accomplish the above purposes are not eligible. Expenses in connection with new construction are not eligible. "Disability" has the same meaning as it does in the ADA. To be eligible for the tax credit, barrier removals or the provision of services, modifications, materials, or equipment must meet technical standards of the ADA Accessibility Guidelines. These standards are incorporated in Department of Justice regulations implementing Title III of the ADA (28 CFR part 36; 56 CFR 35544, July 26, 1991).

 

Form 8826 - Disabled Access Credit

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Tax Deduction to Remove Architectural and Transportation Barriers to People with Disabilities and Elderly Individuals

(Title 26, IRS Code, section 190). Businesses may deduct up to $15,000 of the costs incurred each 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 this section.

 

ADA Fact Sheet - Tax Incentives for Improving Accessibility

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Publications

 

Publication 524 - Credit for the Elderly or the Disabled

 

Publication 535 - Business Expenses

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Tax Deductions For Home Modifications

Financial incentives are available for modifying an existing home. Cost for certain home improvements made to accommodate a taxpayer, a spouse, or a dependent with a disability such that that person can continue to live at home may be deductible as a medical expense. Improvements including grading a home site to improve access, the construction of ramps, modifying entrances, modifying interior and exterior doorways, installing railing and support bars as well as bathroom modifications may qualify as deductions under this credit. The IRS permits deductions of qualifying medical expenses that amount to more than 7.5 percent of adjusted gross income. For additional details on these expenses, refer to IRS publication 502.

 

Publication 502 - Medical and Dental Expenses

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Impairment and Related Work Expenses

If you have a physical or mental disability that limits your ability to function as an employee, you may be able to deduct some of your work expenses related to your impairment. Some examples would be the cost of an on-the-job attendant, computer software or hardware, or sigh-language interpreters. Refer to IRS publication 529.

 

Publication 529 - Miscellaneous Deductions

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Medical Expenditures

In addition to home modifications, you may be able to deduct the cost of certain educational services and equipment as medical expenses as long as these expenses are made to alleviate your physical or mental condition. Examples of this may include installation of an elevator, the extra cost of brail or alternative format books over regular printed additions, or money required to purchase, train and maintain assistive technology and service animals. See IRS publication 502.

 

Publication 502 - Medical and Dental Expenses

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Ticket to Work Program

The Ticket to Work Program provides Social Security Administration (SSA) beneficiaries with choices for receiving employment services while increasing incentives to serve these individuals. Under the program, SSA provides disability beneficiaries with a Ticket they may use to obtain vocational rehabilitation (VR) services and/or support from an Employment Network (EN) of their choice. Any business can easily become an EN to take advantage of these benefits.

The Social Security Administration awards unlimited non-competitive Employment Network contracts to qualified organizations through an ongoing, open-ended Request for Proposal (RFP) process. This is a very simple process.

Click here to download the RFP documents in a ZIP file.

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