Did you know there are certain tax breaks available to small businesses when they accommodate disabled individuals? This is a brief summation of three of those tax breaks:
The disabled access credit
A small business might be eligible for a nonrefundable credit when it has expenses for providing access to individuals with disabilities. The company can’t have more than 30 full time employees or earned more than $1 million in the prior year in order to be eligible. The credit is available for expenses in each tax year in which a business qualifies.
Some examples of eligible expenses could be: getting rid of physical barriers that prevent accessibility to disabled people; providing interpreters to hearing-impaired individuals; and acquiring or modifying equipment for people with disabilities.
The architectural barrier removal deduction
This tax law encourages businesses to remove architectural and transportation barriers to the disabled and the elderly. A company can deduct up to $15,000 a year for qualified expenses, and is claimed by listing it as a separate expense on the income tax return.
Furthermore, a small business may be entitled to claim both the disabled tax credit and the architectural barrier removal deduction in the same tax year. To claim both tax breaks, the deduction must be reduced by the amount of the credit claimed. If this is the case for your small business, Filler & Associates can handle the details.
The Work Opportunity Tax Credit (WOTC)
Under the revised WOTC, a business is entitled to a tax credit of up to 40 percent of the first $6,000 of first-year wages of a new employee if they are a member of specified targeted group. Thus, the maximum credit is $2,400.
An employee with a disability can qualify as a member of a targeted group if the appropriate government agencies have certified the employee as being disabled. The WOTC for a disabled employee is available once he or she has worked for your business for at least 120 hours or 90 days.
Also, the WOTC rules apply to veterans with a service-connected disability, and the first-year wages taken into account for qualified disabled veterans has increased from $6,000 to $12,000.
With some advance tax planning, your business can maximize the tax benefits available for accommodating disabled people. Consult with Filler & Associates for implementation of these rules.