November 20th, 2012

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Tax Relief Available for Accommodating People With Disabilities


If the Work Opportunity Tax Credit (WOTC) is not renewed in the coming year, as discussed yesterday, there are still other programs that provide tax relief for businesses that encourage hiring people with disabilities.

Small businesses have the Disabled Access Credit (DAC) available to make their workplaces more accommodating to a variety of disabilities. The Job Accommodation Network (JAN) website says any business with gross revenues under $1 million and with fewer than 30 employees qualifies for the credit, which provides as much as $5,000 in tax relief in any given year. says the DAC can be used to remove “architectural, communication, physical or transportation barriers that prevent a business from being accessible to, or usable by, individuals with disabilities.” This broad range of eligible deductions allows for the purchase of any number of technologies that help people with disabilities perform the duties of their job description, including paying for qualified assistants for individuals with a hearing or visual disability.

In addition to the DAC, another, larger tax credit is also available for the removal of architectural and transportation barriers under section 190 of the current tax code. This deduction is important for businesses that need to accommodate customers who might have disabilities as well as employees, as it provides up to $15,000 in tax relief for improving accessibility of a facility, including buildings, structures, equipment, roads, walkways, and parking lots. AskJan says this deduction also enables companies to make vehicles that it owns or leases accessible to employees with disabilities, if transportation is required to perform their jobs.

Business can also work with a state’s vocational rehabilitation (VR) agency to provide job training for people with disabilities. AskJan describes this as a federal-state program funded through the Rehabilitation Act of 1973. The VR agency will even share the cost of wages for an employee with a disability for a predetermined period of time if hired through their agency. While individual states decide the services its vocational rehab agencies will provide, AskJan lists some of the possibilities:

… [I]n general VR can act as a recruiter and consultant for employers, conduct job analyses and provide rehabilitation engineering services for architectural barrier removal and worksite modifications, and conduct awareness training for a company’s management and supervisory personnel.

In Massachusetts, vocational rehabilitation services are administered through the Massachusetts Rehabilitation Commission within the Department of Health and Human Services. The “Historical Facts” page shows it is currently serving more than 22,000 individuals with disabilities in the state, resulting in total earnings of $59.2 million during the past fiscal year. With those earnings contributing towards the overall tax base, you can see how taking advantage of these deductions continues to benefit both the businesses and the communities in which a company resides.

Use the comments section to share any experiences you’ve had with vocational rehabilitation programs or tax credits for accommodating people with disabilities.

Image by na0905.

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