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Tax Breaks for Hiring People With Disabilities As a regular eSight visitor, you already know that hiring people with disabilities is a strategy that makes sense for your company, whether it's large or small. As Dupont has found year after year in more than 25 years of studies, these workers meet or exceed non-disabled workers in terms of productivity, loyalty, reliability and safety. However, during an economic slowdown, it may be more difficult to justify taking even the minimal extra steps in choosing a disabled candidate over a non-disabled one who is equally qualified for a particular position. But what if I offered you money? Well, not me, actually -- but did you know that the Internal Revenue Service has tax breaks available as incentives for businesses to hire people with disabilities? Did you also know similar programs exist in individual states and in other countries?Yes, business can have a big heart, but the "botXXXXX XXXXXne" is more than a little important, too, and sometimes plays a deciding factor in hiring decisions. So, whether you are the decision maker for your company or an advocate for an inclusive workplace, you need to know about this golden opportunity to Do Good and Do Well at the same time. Go to Top of Page
Work Opportunity Credit The Work Opportunity Tax Credit (WOTC) allows you to defer your federal tax liability for every physically or mentally disabled person you hire via a vocational rehabilitation referral.
The new hire must be certified and there are some limitations on this. See IRS Tax Form 8850 (Pre- Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits).
The work opportunity tax credit (WOTC) allows employers who hire members of certain targeted groups before September 2011 to get a credit against income tax of a percentage of first-year wages up to $6,000 per employee ($12,000 for qualified veterans; and $3,000 for qualified summer youth employees).
Targeted groups: Qualified IV-A recipients (qualified recipients of aid to families with dependent children or successor program), qualified veterans, qualified ex-felons, designated community residents(i.e., the former "high-risk youths"),vocational rehabilitation referrals, qualified summer youth employees, recipients, i.e., members of a family that receives or received assistance under a IV-A program for a minimum period of time.
To be eligible for the credit, a new employee must be certified as a member of a targeted group by a state Employment Security Agency (SESA).