Tax credits 2013


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Business Tax credits for Disability Access and Hiring People with disabilities / veterans / specific target groups in the Work Opportunity Tax Credit (WOTC)

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Tax credits 2013

  1. 1. TAX INCENTIVES Presented by theCenter for Accessible Living
  2. 2. Disability in ContextPeople with disabilities lead similar lives to those people without disabilities.More than 58 Million people (1 in 5) in the US have a physical, mental or emotional disability. They work, play and have families like everyone else. 20 million families have at least one (1) member with a disability. Source:
  3. 3. Disability in ContextAmerican Sign language is the third most used language in the US.
  4. 4. Disability in ContextAutism is the fastest-growing developmental disability in the US. Currently with 1 in 150* births. Currently with 1 in 110* births. Currently with 1 in 88* births.
  5. 5. Disability in Context Generalizations Disability can be inherited or acquired as a result of accident, injury or age.Disability can happen at any time, to anyone! As diverse as the community we live in – every culture, race, religion, ethnicity, gender, sex ual orientation, socioeconomic class, etc.
  6. 6. Disability In ContextEmployment rate for working age people with disabilities was 27% in January 2013. Employment rates from US Department of Labor
  7. 7. Disability in ContextCompared to a 69.7% employment rate for non-disabled.The gap between the employment rate of persons of 16-64 years of age with and without disabilities was 42.8%, not seasonally adjusted. Employment rates from US Department of Labor
  8. 8. Disability in Context People with disabilities continue to represents a largely untapped and diverse pool of qualified job candidates
  9. 9. Disability in Context In a recent national survey: 92% of consumers surveyed felt more favorable toward companies that hire individuals with disabilities. 87% said they would prefer to give their business to such companies.Consumer Percentages from
  10. 10. Disability in Context 58 million people strong, people with disabilities boasts $1 trillion in discretionary spending power.Income according to the U.S. Department of Labor:
  11. 11. FALSE! 50.5% of accommodations cost nothingThe average accommodation is reportedas being a one time cost of $500 or less. Figures from the Job Accommodation Network:
  12. 12. Myths & FactsPeople with disabilities are generally out sick more often. People with disabilities are more likely to have accidents than other employees. An employer’s workers’ compensation rates rise when they hire workers with disabilities. mployment_of_Individuals_with_Disabilities.pdf
  13. 13. Myths & Facts Employees with disabilities have shownto have equal job performance ratings to nondisabled.Employees with disabilities add valuable perspectives and diverse backgrounds to companies and workgroups. mployment_of_Individuals_with_Disabilities.pdf
  14. 14. Employment Credit  Work Opportunity Tax Credit  Kentucky Specific Tax CreditsAccess Credits and Deductions Disabled Access Credit Barrier Removal Tax Deduction
  15. 15. Work Opportunity Tax Credit (WOTC)
  16. 16. Provides a tax credit for employers who hire targeted low-income groupsHas been extended to cover individuals who begin to work for an employer before December 31, 2013Includes former Welfare to Work (WTW) regualtions
  17. 17. Who is Eligible:• Short-term &Long-term Family Assistance Recipient (TANF)• Qualified SNAP (Food Stamp) Recipient• Qualified Summer Youth Employee*• Designated Community Residents* *Residence in a Federal Empowerment Zone (EZ), Enterprise Community (EC), Renewal Community (RC) or Rural Renewal County (RRC) is required
  18. 18. Who is Eligible:• Vocational Rehabilitation Referral• Qualified Ex-Felon• Supplemental Security Income Recipient• Qualified Veterans* *Amounts and other qualifications are different for Veteran Populations.
  19. 19. Long-term Temporary Assistance for Needy Families (TANF) RecipientA member of a family that meets one of the following circumstances:Received TANF benefits for at least 18 consecutive months ending on the hiring date.Received TANF benefits for at least 18 consecutive or non-consecutive months after August 5, 1997, and has a hiring date that is not more than 2 years after the end of the earliest 18-month period after August 5, 1997.Stopped being eligible for TANF payments during the past 2 years because a Federal or state law limited the maximum time those payments could be made.
  20. 20. Short-term (TANF) RecipientA member of a family that received TANF benefits for any 9-month period during the 18-month period ending on the hiring date. SNAP (food stamp) Recipient An 18-39 year old member of a family that received Supplemental Nutrition Assistance Program (SNAP) benefits for the 6 months ending of the hiring date or received SNAP benefits for at least 3 of the 5 months ending on the hiring date.
  21. 21. Designated Community ResidentAn 18-39 year old who lives within one of the federally designated Rural Renewal Counties or Empowerment Zones. Vocational Rehabilitation Referral An individual with a disability who completed or is completing rehabilitative services from a state-certified agency, an Employment Network under the Ticket to Work program, or the U.S. Department of Veteran Affairs.
  22. 22. Ex-FelonsAn individual who has been convicted of a felony and has a hiring date that is not more than 1 year after the conviction or release from prison. Supplemental Security Income (SSI) recipientA recipient of SSI benefits for any month ending during the past 60-day period ending on the hire date. Summer Youth EmployeeA 16 or 17 year-old youth who works for the employer between May 1 and September 15 and lives in an Empowerment Zone.
  23. 23. A Veteran who is:A member of a family that received SNAP benefits (food stamps) for at least a 3-month period during the 15-month period ending on the hiring date.Entitled to compensation for a service-connected disability:• Hired within 1 year of discharge or release from active duty• Unemployed at least 6 months in the year ending on the hiring dateUnemployed:• At least 4 weeks• At least 6 months
  24. 24. Please note that to be considered a veteran eligible for WOTC, an individual must meet these two standards: Have served on active duty (not including training) in the U.S. Armed Forces for more than 180 days or have been discharged or released from active duty for a service-connected disability Not have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date
  25. 25. How are credits calculated?25% or 40% of a new employees first-year wages, up to the maximum for the target group to which the employee belongs. Employers will earn 25% if the employee works at least 120 hours and 40% if the employee works at least 400 hours.
  26. 26. What is the amount?Generally, an employer may take a tax credit of up to 40 percent of the first $6,000 (up to $2,400) in wages paid during the first 12 months for each eligible new hire.
  27. 27. Other amounts (Long-Term TANF)Employers can earn a maximum $9000 tax credit per eligible hire for hiring individuals certified as Long-term Family Assistance Recipients (2 years of credits).
  28. 28. Other amounts (Long-Term TANF)If the individual works at least 120 hours in the first year, the employer may claim a tax credit equal to 40% of first year wages, up to the first $10,000.If the individual works at least 400 hours in the second year, the employer may claim a tax credit equal to 50% of second year wages, up to the first $10,000.
  29. 29. Other amounts (Disabled Veterans)For Veterans with a service-connected disability hired one year from leaving service with the same qualified wagescap ($12,000) and maximum tax credit ($4,800).
  30. 30. Other amounts (Disabled Veterans)For Veterans with a service-connected disability unemployed for at least 6months with the qualified wages cap ($24,000) and the maximum tax credit ($9,600).
  31. 31. Other amounts (Veterans)For Veterans unemployed for at least 6months with the qualified wages cap ($14,000) and the maximum tax credit ($5,600).
  32. 32. HOW CAN EMPLOYERS PARTICIPATE IN THE WOTC? To receive certification that a new employee qualifies the employer for this tax credit, the employer must:
  33. 33. Complete page one IRS Form 8850, Pre-Screening Notice and Certification Requestfor the Work Opportunity Credit, by the daythe job offer is made.Complete page two IRS Form 8850, Pre-Screening Notice and Certification Requestfor the Work Opportunity Credit, after theindividual is hired.
  34. 34. • Complete either the one page ETA Form 9061, Individual Characteristics Form• or ETA Form 9062 (If the new employee has already been conditionally certified as belonging to a WOTC target group, complete the bottom part of ETA Form 9062 (and sign and date it), that he or she has been given by a State Employment Agency or participating agency, e.g., Vocational Rehabilitation.)
  35. 35. (ETA Form 9061 or Form 9062) Continued:If the new employee has not beenconditionally certified, the employer and/orthe new employee must fill out andcomplete, sign and date ETA Form 9061
  36. 36. Mail the signed IRS and ETA forms to theemployers State Workforce Agency.**MAKE SURE TO MAIL FORMS IN WITHIN 28 DAYS OF FIRST DAY ON JOB.**
  37. 37. All required forms and related documents must be mailed to the following address: WOTC Kentucky Office of Employment & Training 275 East Main Street, 2W-A Frankfort, Kentucky 40621. Questions may be directed to program staff at 502/782-3069.
  38. 38. To get IRS Form 8850, the Work Opportunity Tax Credit Pre-Screening Notice and Certification Request, instructions, and ETA Forms 9061 & 9062 visit: es/opptax/wotcEmployers.cfm
  39. 39. More information:Visit and click “employer services” then “tax credits”Or visit es/opptax/
  40. 40. May be used once per employee
  41. 41. The Unemployment Tax Credit (UTC)
  42. 42. The Unemployment Tax Credit (UTC)program provides employers a credit of$100 per eligible hire against Kentuckyincome taxes owed for hiring residents whohave been unemployed for 60 days andremain on the payroll for at least 180 days.
  43. 43. For more information, contact WOTCUnit at 502-782-3069.Or visit
  44. 44. Access Credits and Deductions Disabled Access Credit Barrier Removal Tax Deduction
  45. 45. Barrier Removal Tax Deduction
  46. 46. Architectural/Transportation Tax DeductionBarrier Removal Tax Deduction [Section190, IRS Code] • For ALL businesses • Up to $15,000 for structural renovations or transportation improvements, not new construction • Must comply with ADAAG • Subtract from total income before taxes • No extra IRS form
  47. 47. • Getting in !• Access to goods & services For: customers, clients, patrons• Restrooms• Other amenities
  48. 48. • Signage• Parking• Path of travel• Entrances• Reach• Restrooms
  49. 49. • Public telephones/ water fountains• Elevators• Meeting rooms• Emergency procedures• Web sites• Specific purpose (hotel rooms, etc)
  50. 50. • Providing goods curbside• Providing home delivery• Retrieving merchandise from inaccessible shelves or racks• Relocating activities to accessible locations
  51. 51. Disabled Access Credit
  52. 52. • Only for small businesses  Less than $1 million in revenues  30 or fewer employees• 50% of “eligible access expenditures” up to $10,250 after first $250• Credit subtracted from tax liability• Expenses must be incurred to comply with the requirements of the ADA.•IRS Form 8826
  53. 53. • “Eligible access expenditures”  Removal of structural barriers  Purchase of adaptive equipment (assistive listening devices, TTY)  Services (sign language interpreter, readers) Materials in alternate format (audiotape, large print, Braille)
  54. 54. • May be used annually• Credit and deduction can be combined by small businesses• May not carry over expenses from one year to next• But if amount of credit exceeds tax owed, may carry forward unused portion of credit to next year
  55. 55. KY OET Work Opportunity Tax Credit Website Federal Work Opportunity Tax Credit Website Federal ADA Tax Incentives Or
  56. 56. Vocational Rehabilitation ProgramsOffice of Employment and Training Office for the Blind Center for Accessible Living Veteran & VA Programs (CWT) Volunteer/Mentorship Programs AND MORE…
  57. 57. Center for Accessible Living 305 W Broadway, Suite 200 Louisville, KY 40202(502) 589-6620 (v) • (502) 589-6690 (TDD) * * * * * 1051 N. 16th Street, Suite C Murray, KY 42071 (270) 753-7676 (v) • (270) 767-0549 (TDD) * * * * *