518-373-4111
The disabled access tax credit is one of the tax breaks available from the IRS to businesses when they accommodate disabled individuals. Here is a brief summary of three key tax breaks:
1. The disabled access credit
A small business may be entitled to a nonrefundable credit when it incurs expenses for providing access to individuals with disabilities. To be eligible, the business can’t have earned more than $1 million or have had more than 30 full-time employees in the prior year. This credit is available for expenses in each tax year in which a business qualifies.
Examples of eligible expenses include: removing barriers that prevent accessibility to disabled people; providing interpreters to hearing-impaired individuals; and acquiring or modifying equipment for people with disabilities.
2. The architectural barrier removal deduction
The tax law encourages businesses of any size to remove architectural and transportation barriers to the disabled and the elderly. Your business can deduct up to $15,000 a year for qualified items that normally must be capitalized. The deduction is claimed by listing it as a separate expense on your 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 if it has incurred qualified expenses. To claim both tax breaks, the deduction must be reduced by the amount of the credit claimed. Your tax adviser can handle the details.
3. The Work Opportunity Tax Credit (WOTC) – Under the revised WOTC, a business can take a tax credit up to 40 percent of the first $6,000 of first-year wages of a new-hire if the employee is a member of specified “targeted group.” Thus, the maximum credit is $2,400.
An employee with a disability qualifies as a member of a targeted group as long as 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.
The IRS notes that revised WOTC rules apply to veterans with a service-connected disability. The first-year wages taken into account for qualified disabled veterans hired after May 25, 2007 increased from $6,000 to $12,000.
For more information, visit the IRS website or contact GTM at (518) 373-4111.
©2014 Thompson Reuters
