As a small business, you may wish to hire employees with a disability. The Americans with Disabilities Act, or ADA, actually requires businesses with 15 or more employees to provide reasonable accommodation for individuals with disabilities, unless it would cause undue hardship. If you choose to hire an employee with a disability, you may qualify for a federal or state tax incentive to help cover the cost of making the necessary accommodations required for the employee to be able to perform the job. While individual states may also offer tax incentives, the following three federal tax incentives apply to all U.S. employers.
Architectural/Transportation Tax Deduction: This deduction can be used each year by a business that incurred expenses for removing physical, structural, and transportation barriers for persons with disabilities, for example, providing parking, building ramps or widening hallways. A deduction of up to $15,000 may be claimed each year.
Small Business Tax Credit: This is a credit that is specifically aimed at small business that employed less than 30 full-time employees or had less than $1 million in gross receipts. The credit may be taken each year for expenses related to making your business more accessible to persons with disabilities. Examples of covered expenses include sign language interpreters, adaptive equipment, or printed materials in alternate formats such as braille. A business may claim 50 percent of expenses over $250 up to a maximum credit of $5,000.
Work Opportunity Tax Credit: This credit provides an incentive for businesses that hire employees from certain targeted groups. An employer who hires an employee receiving Supplemental Security Income or who is a certified vocational rehabilitation participant may claim the WOTC. An employee may claim a credit in the amount of 40 percent of the first $6000 in wages during the first year the employee works for the company.
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