1. Disability Program Navigator Training A Joint Initiative of the U.S. Department of Labor and the Social Security Administration Working with Employers: Disability-Related Tax Credits and Deductions for Employers and Employees James Schmeling, J.D.

2. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Federal and State Tax Credits and Deductions There are several tax credits and deductions for employers who hire and accommodate employees with disabilities There are also tax credits and deductions which employees with disabilities may use Navigators should know about the credits and share information with employers and employees about the credits

3. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Small Business Disabled Tax Credit Purpose Remove barriers and accommodate employees and customers with disabilities Expenses Covered Acquire or modify Devices & Equipment Remove Barriers Hire Interpreters To comply with the ADA and its rules Amount of the Tax Break 50% of $10,250 spent each year, less the first $250. $5,000. annual cap.

4. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Small Business Disabled Tax Credit Qualifying Businesses ADA Title I or Title III entity and; 30 or fewer employees OR $1 million or less in gross annual receipts Legal References 26 United States Code Section 44 No IRS regulations Private Ruling 9716009 More information http://www.usdoj.gov/crt/ada/taxpack.htm http://www.usdoj.gov/crt/ada/taxpack.htm

5. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Architectural and Transportation Barrier Removal Tax Deduction Purpose Remove barriers, make business facilities and public transportation vehicles accessible Expenses Covered Remove Barriers to disabled and elderly Meet IRS Standards Amount of the Tax Break $15,000 annual cap

6. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Architectural and Transportation Barrier Removal Tax Deduction Qualifying Businesses Any taxpayer owning or leasing a facility or public transportation vehicle in its business. Legal References 26 U.S.C. 190 26 Internal Revenue Code Section 1.90 More information http://www.usdoj.gov/crt/ada/taxpack.htm http://www.usdoj.gov/crt/ada/taxpack.htm

7. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Work Opportunity Tax Credit Purpose Hire workers with disabilities and integrate the workforce Expenses Covered Part of first year’s wages paid to worker with a disability, referred by VRS; others Amount of the Tax Break 40% of the first $6,000 in wages paid the first year $2,400 cap per EE Qualifying Businesses Employer who hires a person with a disability via a Voc Rehab Services referral

8. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Work Opportunity Tax Credit Legal References 26 U.S.C. Section 51 26 I.R.C. Section 1.51 More information http://www.uses.doleta.gov/wotcdata.asp, http://www.uses.doleta.gov/updates.asp, and http://www.dol.gov/odep/media/press/tax.htmhttp://www.uses.doleta.gov/wotcdata.asp http://www.uses.doleta.gov/updates.asp http://www.dol.gov/odep/media/press/tax.htm State WOTC Coordinators Contact List http://www.uses.doleta.gov/pdf/sesacoorddirect00.pdf http://www.uses.doleta.gov/pdf/sesacoorddirect00.pdf Work Opportunity and Welfare-to-work Tax Credits Reporting System User’s Guide http://www.uses.doleta.gov/pdf/WOTC_WtW_Reporting_System_Us er_s_Guide.pdf http://www.uses.doleta.gov/pdf/WOTC_WtW_Reporting_System_Us er_s_Guide.pdf

9. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Welfare-to-Work Tax Credit Purpose Encourage employers to hire long-term family assistance recipients who begin to work any time after December 31, 1997, and before January, 2004, to help people move from welfare to work and economic self-sufficiency. Expenses Covered Wages, including tax-exempt amounts received under accident or health plans as well as educational assistance and dependent assistance programs. Amount of the Tax Break 35% of qualified wages for the first year of employment and 50% for the second year. Qualified wages are capped at $10,000 per year.

10. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Welfare-to-Work Tax Credit Qualifying Businesses Employers which apply for and receive certification from their State Employment Security Agency (SESA), also known as the State Workforce Agency (SWA), that their new hire is a long-term TANF/AFDC recipient. Legal References P.L. 105-34, Taxpayer Relief Act of 1997 Re-authorized by P.L. 107-147, Job Creation and Worker Assistance Act of 2002 More information http://www.uses.doleta.gov/wtw.asphttp://www.uses.doleta.gov/wtw.asp

11. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Example State Tax Credits and Deductions (MANY more exist) Iowa Assistive Device Tax Credit Iowa Small Business Income Tax Deduction New York Workers with Disabilities Employment Tax Credit (WETC) Maryland Disability Employment Tax Credit

12. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Iowa Assistive Device Tax Credit Purpose Hire, retain and accommodate employees with disabilities Expenses Covered Buy, Rent or Modify Assistive Devices Make Workplace Modifications Amount of the Tax Break 50% of the first $5,000 spent per year $2,500. annual cap $500K fiscal year cap: earliest filed claims paid

13. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Iowa Assistive Device Tax Credit Qualifying Businesses Small Businesses with no more than 14 employees OR $3 million or less in annual gross receipts Legal References Iowa Code Sections 422.11E and 422.33.8A IDED, Iowa Admin. Code 261-66 and IDRF, Iowa Admin. Code 701-42.14 More information http://www.iowasmart.com/services/small_business/tax_ credit.html http://www.state.ia.us/tax/1040%20Expanded/Line/02Lin e66.html

14. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Iowa Small Business Income Tax Deduction Purpose Hire workers with disabilities and integrate the workforce Expenses Covered Part of first year’s wages paid to workers with disabilities Amount of the Tax Break 65% of wages paid $20,000 cap per employee

15. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Iowa Small Business Income Tax Deduction Qualifying Businesses Small businesses/Farms with 20 or fewer employees, AND $3 million or less in gross revenues Legal References Iowa Code Section 422.7(12) Iowa Admin. Code 701 IAC 40.21, 53.11, 59.8. More information http://www.state.ia.us/tax/educate/78578.html

16. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 New York Workers with Disabilities Employment Tax Credit (WETC) Purpose Assist individuals with disabilities in securing employment - WETC is an employer friendly benefit for hiring workers with disabilities Expenses covered Part of second year’s wages paid to employees with disabilities for employees who meet the eligibility requirements for certification under the Work Opportunity Tax Credit (WOTC) program as a vocational rehabilitation referral; and, who are certified by the New York State Education Department's Office of Vocational and Educational Services for Individuals with Disabilities (VESID), or are certified by the Office of Children and Family Services' Commission for the Blind and the Visually Handicapped (CBVH)

17. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 New York Workers with Disabilities Employment Tax Credit (WETC) Amount of the tax break 35% of the first $6,000 in wages paid during the second year of employment while the WOTC is in effect, otherwise it is available in the first year of employment Qualifying businesses See the PDF linked below – certain corporations and businesses specifically noted Legal References Chapter 142 of the New York State Laws of 1997 More information http://www.labor.state.ny.us/business_ny/developing_workforce/eds u/wetc.htm http://www.tax.state.ny.us/pdf/memos/Corporation/m98_3c.pdf

18. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Maryland Disability Employment Tax Credit Purpose Enhance employment opportunities for persons with disabilities as defined by the Americans with Disabilities Act (ADA) for employees with disabilities hired on or after October 1, 1997 but before June 30, 2007 Expenses covered Portions of the first and second year’s wages, and also for work-related childcare or transportation expenses paid by the employer.

19. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Maryland Disability Employment Tax Credit Amount of the tax break For each taxable year a credit is allowed in an amount equal to 30% of up to the first $6000 ($1800) of wages paid during the first year and 20% of up to the first $6000 ($1200) during the second year of employment. A credit of up to $600 of the qualified childcare or transportation expenses incurred during the first year of employment, and up to $500 for the second year. Qualifying businesses Sole proprietorships, corporations, tax-exempt non-profit organizations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit. More information http://www.dllr.state.md.us/employment/mdetc.htm http://business.marylandtaxes.com/taxinfo/taxcredit/disability/default.asp

20. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 Additional Resources Tax Incentives For Business http://www.dol.gov/odep/pubs/ek97/tax.htm Assistive Technology Tax Credits – RESNA information page http://128.104.192.129/taproject/policy/funding/t axcredit.html SPECIAL THANKS to the Iowa Clinical Law Program for their chart with information on Federal Tax Credits and Iowa Tax Credits

21. Disability Program Navigator Training Washington, D.C. / November 3 – 6, 2003 This training has been designed and developed by the Law, Health Policy & Disability Center (LHPDC) of the University of Iowa College of Law disability.law.uiowa.edu