Employers can Receive Tax Credits for Hires
Work Opportunity Tax Credit - Employers can receive a tax credit of up to 25% for the employee who meets the criteria for a Targeted Group and works 120 hours or a 40% tax credit for employees who work more than 400 hours. This does not pertain to new hires after Jan. 1, 2006.
To help determine if a worker will make them eligible for this tax credit, the Internal Revenue Service developed Form 8850 "Work Opportunity Credit Pre-Screening Notice and Certification Request" This form is available on the IRS home page at http://www.irs.ustreas.gov or employers may call 1-800 829-3676 to request a copy of the form. Or visit the WOTC website at http://www.doleta.gov/business/incentives/opptax/.
IRS Section 190 Tax Credit
This provision allows for a tax credit of up to $15,000 to an employer/property owner in order to make physical and/or reasonable accommodations, to assist a person in returning to work. Examples of allowable expenditures are as follows:
- Ramp Accessibility
- Door Accessibility
- Work Station Accessibility
- Bathroom Accessibility
- Lunch Room Accessibility
- General Building Accessibility
IRS Section 44 Tax Credit
This credit provides up to $5000 for certain expenditures targeted towards ADA compliance. In essence, a qualifying small business may claim a tax credit of 50% of the ADA compliance expenditures it incurs ranging from $250 to $10,250. A qualifying small business has been defined as one with gross receipts of less then $1 million during a taxable year and employing fewer than 31 full time employees.
Examples of expenditures that may be covered are as follows:
- Removal of architectural, communication, physical or transportation barriers
- Providing qualified interpreters or other accommodations for hearing impaired persons
- Providing accommodations for persons who are visually impaired
- Acquiring or modifying equipment or devices
- Providing other similar services, modifications, materials, or equipment
- Job Coaching/Training accommodation
Due Diligence Statement:
When planning or actual using any tax credit, always consult with your tax professional as part of the planning process. This will make sure the tax credit is allowable and reasonable in your particular situation.
This information is provided by the Massachusetts Rehabilitation Commission.