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Tax incentives available for hiring the disabled


March 29, 2011
We’re continuing to write about the Americans with Disabilities Act (ADA). In the last column, we described the ADA, while providing a more specific review of what each of its five Titles actually covers.

Now I want to talk about and provide the specific tax incentives that are available to all private employers for the actual hiring and employment of individuals with disabilities. There are several such tax incentives provided by legislation for people with disabilities. They include the Disabled Access Tax credit; the Tax Deduction to Remove Architectural and Transportation Barriers to People with Disabilities and Elderly Individuals; and the Targeted Jobs Tax Credit.

The tax credit is Title 26, IRC, Section 44; the tax deduction is Title 26, IRC, Section 190; and the targeted jobs tax credit is Title 26, IRC, Section 51. Employers who are now hiring or have already hired a person with a disability should check with or otherwise advise their CPA or other tax preparer about these available tax incentives, just in case, as they would apply to their tax preparation and filing.

The Targeted Jobs Tax Credit is available to “eligible small businesses” in the amount of 50 percent of "eligible access expenditures" that exceed $250, but do not exceed $10,250 for a taxable year. A business may take the credit each year that it makes an eligible access expenditure. Eligible small businesses that would be eligible would include those with either:

• $1 million or less in gross receipts for the preceding tax year; or

• 30 or fewer full-time employees during the preceding tax year.

Eligible access expenditures are amounts paid or incurred by an eligible small business for the purpose of enabling the business to comply with the applicable requirements of the Americans with

Disabilities Act (ADA).

The Tax Deduction to Remove Barriers allows a deduction of up to $15,000 per year for “qualified architectural and transportation barrier removal expenses.” Expenditures to make a facility or public

transportation vehicle owned or leased in connection with a trade or business more accessible to, and usable by, individuals who are handicapped or elderly are eligible for the deduction. This deduction would include those clients or other visitors who would normally and regularly visit this company’s site for any appropriate reason.

The employers are eligible to receive a tax credit up to 40 percent of the first $6,000 of first-year wages of a new employee with a disability who is referred by a state vocational rehabilitation agency, a State

Commission on the Blind, or the U.S. Department of Veterans Affairs, and certified by a State Employment Service.

There is no credit after the first year of employment. For an employer to qualify for the credit, a worker must have been employed for at least 90 days or have completed at least 120 hours of work for the employer.

The point that the Feds are trying to make here is really quite simple. When President Harry S. Truman began the President’s Committee on Employment of the Handicapped (PCEH) in 1947 as its goal of trying to jump start the employment of those WWII veterans who came back from the war with varying degrees of disabilities caused by their war wounds, annual records were kept relative to the actual job performance of those hired vets with war-induced disabilities.

Since 1947, those statistics kept by the PCEH – which is now the Office of Disability Employment Policy (ODEP) of the U. S. Department of Labor - the record of people with disabilities being hired to “real”

jobs has shown them to be safer on the job, more on time to work, more productive, and more loyal to their employer than their non-disabled counterparts, with all of these attributes being those that are looked for and prized by most employers.

Obviously, with this proven, successful record of employee work on the part of people with disabilities, the question became very clear of why these employers who ought to, could be, should be, but weren’t hiring people with disabilities, even though their resume’s warranted a second, and personal interview. Why, then, were these obviously well-qualified - but people with OBVIOUS disabilities - not hired? We tried to find the answer.

To pinpoint the reasons why these employers did NOT hire these people with disabilities, with the permission of the business owners or site managers, interviews were conducted with the employer representatives who had administered the final-decision, face-to-face interviews of all of the

candidates who had made the first “cut” because of their very successful phone interviews. The goal of these interviews was to try to ascertain why the person with the disability wasn’t hired.

Next , we’ll try to explain the reasons why these individuals with disabilities were not hired.

Paul Rendine is chairman of the Disability Advocates of Delmarva Inc. group. He can be contacted at his e-mail address at with any questions, suggestions, or comments.



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