Tax Benefits for Employers

A pair of glasses sitting on a tax form

Employers who accommodate people with disabilities may qualify for tax credits and deductions.

Here’s a list for your reference:

Disabled Access Credit

The Disabled Access Credit provides a non-refundable credit for small businesses that incur expenses to provide access to persons with disabilities. An eligible small business earned $1 million or less or had no more than 30 full-time employees in the previous year; they may take the credit each year they incur access expenditures. Refer to Form 8826, Disabled Access Credit [PDF], for information about eligible expenditures.

Barrier Removal Tax Deduction

The Architectural Barrier Removal Tax Deduction encourages businesses of any size to remove architectural or transportation barriers to the mobility of persons with disabilities. This deduction can also be used to accommodate the elderly. Businesses may claim a deduction of up to $15,000 a year for qualified expenses. Businesses claim the deduction by listing it as a separate expense on their income tax return. Also, businesses may use the Disabled Tax Credit and the architectural/transportation 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

The Work Opportunity Credit provides eligible employers with a tax credit up to 40 percent of the $6,000 of first-year wages of a new employee who 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].

Additional information can be found in the following:

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

Many tax benefits are also available to persons with disabilities, ranging from standard deductions and exemptions to business and itemized deductions to credits. Information about these can be found in Publication 3966, Living and Working with Disabilities [PDF].