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Marvin,EA, Enrolled Agent
Category: Tax
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Experience:  Enrolled to Represent Taxpayers Before The IRS
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I am a manager at a well known hotel. If I hire a legally blind

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I am a manager at a well known hotel. If I hire a legally blind person does my hotel get a tax break, working in kansas?
Submitted: 8 years ago.
Category: Tax
Expert:  Marvin,EA replied 8 years ago.
Hello and thank you for using Just Answer. There is no federal or state tax credits for employer that hire a legally blind person. The legally blind person will receive an additional standard deduction in the amount of $1,400.
Customer: replied 8 years ago.
last yr there was a $10,000.00 TAX BREAK ARE YOU SURE THERE ISN'T A $5,000 TAX BREAK THIS YEAR?
Customer: replied 8 years ago.



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.

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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 botXXXXX XXXXXne is this:

For new hires working over 400 hours, you can receive a tax credit on 40 percent of the employee's wages (up to $6,400) for his first year of employment. For new hires working from 120 to 400 hours, you can receive a credit of 25 percent of the employee's wages for his first year of employment. Your company's deduction for wages generally must be reduced by the amount of the credit.


The value of the credit is the difference between the tax savings the wage deduction would otherwise generate and the dollar-for-dollar tax reduction the credit produces plus the reduced tax deduction that's available. For example, assume a business in the 25 percent tax bracket can use all of the credits it earns in the current year and that it has $6,000 of wages qualifying for the WOTC. That $6,000 of wages will produce a $2,400 tax credit (that saves $2,400 of taxes) and a tax deduction of $3,600 ($6,000 - $2,400) that saves $900 of taxes. Thus, the total tax reduction from the $6,000 of wages is $3,300 ($2,400 + $900). If the business forgoes the credit, those same wages will provide a $6,000 tax deduction (that saves $1,500 of taxes). As a result, the credit is worth $1,800 ($3,300 - $1,500). That works out to a 30 percent after-tax return ($1,800 / $6,000) on $6,000 you were going to have to spend anyway to hire someone. [our emphasis]

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 Washington State Department of Vocational Rehabilitation has some wise advice about how your company can use these incentives:

Use financial incentives as a way to recover some of the costs involved in training and hiring new employees and making facilities accessible. Don't utilize financial work incentives to fill a position with a person with a disability who can't perform the essential functions of the job, with or without reasonable accommodation.

Expert:  Marvin,EA replied 8 years ago.

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).

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