Tax Credits for Employers and Employees

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 significant barriers to employment. 

The WOTC may be claimed by any employer that hires and pays or incurs wages to certain individuals who are certified by a designated local agency as being 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 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 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, and general building accessibility.

The Massachusetts DETC is an employer tax incentive program that boosts job opportunities for individuals with disabilities in the Commonwealth. Employers can 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, can take part in the program. Employees must submit an online certification form to get approved for the DETC.