Recently one of our readers wrote to us and described a scenario that many of us may not often think about: being disabled in the workplace. Being prohibited from participating in typical professional activities due to a disability prevents people from, as our reader put it, “pursuing our goals with the dignity and respect every human deserves.”
Disability inclusion, or making sure everyone has similar opportunities to participate in everyday activities, can be addressed in professional settings with adequate policies, procedures, and accommodations. These accommodations also come with tax incentives. Read on to learn more about how businesses and organizations can incorporate programs and policies to improve the lives of their employees and customers, and how to claim the appropriate tax incentives.
Disabled Access Credit
This tax credit can be claimed up to $5,000 for small businesses that incur costs related to disability inclusion accommodations. Eligible businesses must have 30 or fewer employees and have earned $1 million or less in the previous year. This tax credit is available any year that a business makes cost-related accommodations. Examples of types of projects that qualify for the tax credit include:
- Removing barriers that prevents a business from being accessible
- Providing interpreters or other accommodations for hearing-impaired individuals
- Providing visual materials, like readers or taped texts, for visually-impaired individuals
- Purchasing or modifying equipment or devices
There are some exceptions and accommodations must meet ADA requirements.
To claim the tax credit, businesses must complete Form 8826, Disabled Access Credit. Taxpayers who receive pass-through income other than through partnerships or S-Corps should report expenses on Form 3800.
Work Opportunity Tax Credit (WOTC)
Some disabled adults find significant barriers to gainful employment. To address this, qualified employers may claim the Work Opportunity Tax Credit to hire eligible employees. Target groups included in the WOTC include but are not limited to:
- Vocational Rehabilitation Referral
- Recipients of SNAP (Supplemental Nutrition Assistance Program) or SSI (Supplemental Security Income)
- Ex-felons
- Veterans
To claim WOTC, employers must complete Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and file it with the state within 28 days after the eligible employee begins work. For-profit businesses can use the tax credit for their business income tax liability. Non-profit businesses can use the credit toward employer social security taxes.
These tax incentives are designed to make accommodations for people with disabilities easier to implement. Many businesses may not be aware that these opportunities exist to reclaim expenses incurred for disability inclusion. It is important for businesses to create an equal learning, networking, and working atmosphere, and there are taxable incentives to do so, too. For questions on these and other tax credits, contact the tax team at Naden/Lean.