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Most employers are familiar with the Americans with Disabilities Act (ADA) and its requirement that employers provide reasonable accommodations for qualified individuals with disabilities. Fewer employers know about the federal and state tax incentives that are available to assist employers who incur costs to comply with the ADA.
There is also a federal tax credit for employers who hire individuals whose background might be challenging when seeking a job, such as veterans, residents of some low-income regions, the long-term unemployed, those with felony convictions, and more.
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced barriers to employment.
The WOTC may be claimed by any employer that hires and pays or incurs wages to certain individuals certified by a designated local agency as a member of one of 10 targeted groups.
The IRS has confirmed that the Disabled Access Credit provides up to $5,000 to eligible businesses for eligible access expenditures paid or incurred to comply with the Americans With Disabilities Act (ADA). This program covers a range of eligible expenditures, including barrier removal, accommodations for hearing and/or visually impaired persons, and acquiring or modifying equipment or devices. It also extends to job coaching and training accommodations for employees.
This tax credit allows businesses to deduct up to $15,000 annually for eligible expenses incurred by the employer to make physical and/or reasonable accommodations to assist a person in returning to work. Examples of allowable expenditures include ramp accessibility, door accessibility, workstation accessibility, bathroom accessibility, lunchroom accessibility, and general building accessibility.
Learn more about both credits here.
The Massachusetts DETC is an employer tax incentive program that boosts job opportunities for individuals with disabilities in the Commonwealth. Employers may claim a state tax credit of $5,000, or 30% of the first-year wages, for qualified employees with disabilities after 12 months of continuous employment. In subsequent years, the credit is $2,000 or 30% of wages.
Any Massachusetts resident with a disability who was hired after July 1, 2021, may take part in the program. The employee must be certified by the state as having a disability for the employer to receive the tax credit. The certification form is available here: Complete the Online Certification Form Today.
More information about the DETC is available via this link.
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