Tax Benefits for Employers

Businesses that accommodate people with disabilities may qualify for these tax credits and deductions. More detailed information can be found in the IRS publications referenced.

Disabled Access Credit

This is a non-refundable credit for small businesses that incur expenses to provide access to people with disabilities. A business that earned $1 million or less or had no more than 30 full-time employees in the previous year is eligible and may take the credit each year they have access expenses.

Refer to Form 8826, Disabled Access Credit (PDF) for information about eligible expenditures.

Barrier Removal Tax Deduction

This deduction encourages businesses of any size to remove architectural and transportation barriers to mobility for people with disabilities and seniors. A business may claim a deduction of up to $15,000 per year for qualified expenses for items that usually must be capitalized. The business claims the deduction by listing it as a separate expense on its income tax return. Businesses may use the Disabled Tax Credit and the architectural/transportation Barrier Removal Tax Deduction together in the same tax year if the expenses meet the requirements of both sections. To use both, the deduction is equal to the difference between the total expenditures and the amount of the credit claimed.

Work Opportunity Credit

This provides eligible employers with a tax credit of up to 40% of the first $6,000 of first-year wages of a new employee if the employee is part of a “targeted group.” An employee with a disability is one of the targeted groups for the Work Opportunity Credit, provided the appropriate government agencies have certified the employee as disabled. The credit is available to the employer once the employee has worked for at least 120 hours or 90 days. Employers claim the credit on Form 5884, Work Opportunity Credit (PDF).

Find more information for businesses:

• Publication 535, Business Expenses (PDF)
   
• Publication 954, Tax Incentives for Distressed Communities (PDF)
   
• Form 8826, Disabled Access Credit (PDF)
   
• Form 5884, Work Opportunity Credit (PDF)
   
• Form 3800, General Business Credit (PDF)
   
• Instructions for Form 3800 Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit (PDF)
   
• Instructions for Form 8850 (PDF)

A wide array of tax benefits are also available to people with disabilities, ranging from standard deductions and exemptions to business and itemized deductions to credits.

Find more information about this in Publication 3966, Living and Working with Disabilities (PDF).