Small Business Tax Credits for Hiring Disabled Workers

Tax Credits for Hiring Disabled Workers

Small businesses are the backbone of the American economy and create 65 percent of new net jobs, according to the Small Business Administration (PDF).

How can small businesses, facing constant financial pressure and increasing government regulations, ensure continued growth? One way is to hire people with disabilities.

To help employers capitalize on the value and talent that people with disabilities can offer, the Federal Government offers three types of tax credits: Disabled Access Credit, Architectural Barrier Removal Tax Deduction and Work Opportunity Tax Credit.

To discover other tax breaks for hiring new employees click here.

Tax Credits for Hiring Disabled Workers

Disabled Access Credit

The Disabled Access Credit — a non-refundable annual tax credit for making a business accessible to persons with disabilities — is available to small businesses that earned a maximum of $1 million in revenue or had 30 or fewer full-time employees in the previous year, according to the Internal Revenue Code, Section 44.

The credit equates to 50 percent of expenditures over $250, not to exceed $10,250, for a maximum benefit of $5,000. (There is no credit for the first $250 of expenditures.) Businesses can claim the Disabled Access Credit on IRS Form 8826 (PDF). The credit amount is subtracted from the total tax liability.

Employers can apply this credit toward a variety of costs that include:

  • Sign language interpreters for hearing impaired;
  • Readers for employees with visual impairments;
  • Purchase of adaptive equipment or modification of equipment;
  • Production of print materials in accessible formats, such as Braille, audio tape or large print;
  • Removal of barriers in buildings or vehicles that prevent a business from being accessible to, or usable by, individuals with disabilities.

Architectural Barrier Removal Tax Deduction

The Architectural Barrier Removal Tax Deduction encourages any size business to remove architectural and transportation barriers to the mobility of persons with disabilities. Businesses that comply qualify for a tax deduction of $15,000 per year.

Small businesses can use these incentives in combination with the Disabled Access Credit if the expenditures incurred qualify under both Section 44 and Section 190 of the IRS tax code.

For example, a small business that spends $20,000 for access modifications may take a tax credit of $5000 and a deduction of $15,000. The deduction is equal to the difference between the total costs and the amount of the credit claimed.

Eligible architectural adaptations include:

  • Providing accessible parking spaces, ramps and curb cuts;
  • Making telephones, water fountains and restrooms accessible to persons using wheelchairs;
  • Making walkways and paths of travel accessible (e.g., 32-inch doorways when open at a 90-degree angle; 36-48 inch wide hallways or sidewalks free of obstruction);
  • Providing accessible entrances to buildings (e.g., automatic doors, proper door weights, etc.).

Businesses cannot use the tax deduction for expenses related to new construction, complete renovation or normal replacement of depreciable equipment. Nor can they use it for the same cost covered by another tax credit.

Work Opportunity Tax Credit

The Work Opportunity Tax Credit is the third tax advantage available to all businesses. It allows employers who fill a vacant position with a WOTC-certified employee to qualify to claim a federal income tax credit for a portion of the new employee’s salary.

Individuals eligible for certification include job seekers with disabilities referred by a vocational rehabilitation service or who have received Social Security Income (SSI) benefits within 60 days before being hired.

The tax credit applies to the first $6,000 in wages paid to each new hire for the first year of employment, with a maximum tax credit of up to $2,400 per person.

Businesses must complete and submit IRS Form 8850 (PDF) and submit the Department of Labor’s Employment and Training Administration (ETA) Form 9061 (PDF).

WOTC Extension for Hiring Veterans with Disabilities

A version of the WOTC applies to employers who hire military veterans with service-connected disabilities through the Veterans Opportunity to Work (VOW) to Hire Heroes Act of 2011.

The extension provides up to $4,800 of first-year wage reimbursement for veterans with service-connected disabilities hired within one year of leaving the armed forces. A $9,600 refund of first-year wages is available for those who have been unemployed for at least six months.

Additional Resources

The following resources provide more information about Federal Government tax credits and deductions for hiring persons with disabilities:

  • Hire Gauge. Here’s an online calculator that helps small businesses determine the approximate amount of tax credits and deductions for hiring persons with disabilities. (Think Beyond the Label)

Nursery Employee Photo via Shutterstock

This article, "Small Business Tax Credits for Hiring Disabled Workers" was first published on Small Business Trends

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Enhancing Your Small Business Brand

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enhance your brand

Your company already has a brand. And it’s not your logo. It’s your image to the world, based on what they see, hear and experience about you.

Even though your brand is ultimately determined by public perception, you can still influence feelings about your small business with the right strategy, visuals and messaging in place.

So are you maximizing your opportunities to enhance your company’s greatness? Consider these three areas where you can create meaningful, relevant experiences with your audience to strengthen and enhance your brand.

Online Presence

In today’s Internet-centric world, most people use the Web to search for a product or service. So it’s imperative for a small business to have a strong online presence to build a reliable brand, which you can easily create with a domain name.

A domain name can be leveraged in several ways. If you’re not ready to launch a website just yet, you can still get started with:

  • Business- branded email – show the world your company is established and professional so potential customers will find you more credible.
  • A Custom Web Address to Your Social Media Page – No website? No problem. A domain name lets you connect a custom web address to your social media or ecommerce page, allowing it to act as a business website. Now when a customer types in your web address, it takes them directly to your social media presence. Having your own web address makes it easy to tell people where to find you online. And, if you want to create a website in the future, you already have a great web address that your customers know.

Then once you’re ready to take the next step, launch a:

  • Company website – gain trust with online consumers and reach a wider audience with your message 24/7. And make sure your site is mobile friendly too

Digital Marketing

With so much competition to choose from, promoting your business frequently helps keep you top-of-mind. Showcase what defines your brand from the competition by using these marketing methods that will build recognition and trust amongst existing and potential clients:

  • Email  boost customer loyalty and drive business to on- and offline channels.
  • SEO  increase your website’s visibility to search engines so your site reaches more potential online consumers.
  • Social Media Advertising – try paid advertising on social networks where your customers and prospects spend time. Many social platforms have budget-friendly options. Here are some options:
    • Twitter¹ ads can work with any budget, and can easily be set up with just a credit card.
    • Facebook² and LinkedIn³ allow you to segment advertising targets by age, gender, location and interests, among others.
    • YouTube4 offers free services, charging fees only if users actually watch your videos.
  • Content – create and distribute unique content to attract customers to your brand, products and services.

Consistent Experience

Whether it’s spoken over the telephone, written on a blog or printed on a business card, providing a consistent experience through all business touch points is key to building a strong brand that resonates with your audience. Consider your:

  • Customer service – take the necessary steps to ensure you are providing a consistent, seamless customer service experience through all channels whether it’s your help desk, live chat, and yes, social media.
  • Design & Messaging – be consistent with your logo, colors and graphics (i.e., stationary, brochures, apparel) and messaging across all forms of communication (i.e., web articles, Tweets, newsletter) since this is key to building an effective, accurate brand.

Bottom line: your brand is not a fancy symbol, but what the public feels (and then shares!) about you. By clearly communicating who you are and what you’re about, the world will eventually see how great you are too.

To learn about driving business success through personal branding, click here.

1Twitter, Inc. Accessed Feb. 18, 2015.
2Facebook, Inc. Accessed Feb. 18, 2015.
3LinkedIn Corporation. Accessed Feb. 18, 2015.
4YouTube. Accessed Feb. 18, 2015.

Brand Image via Shutterstock

This article, "Enhancing Your Small Business Brand" was first published on Small Business Trends

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