tax credits 2013

TAX INCENTIVES

Presented by the

Center for Accessible Living

People 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.

Disability in Context

Source: www.census.gov

Disability in Context

American Sign language is the third most used language in the US.

Disability in Context

Autism 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.

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, sexual orientation, socioeconomic class, etc.

Disability in ContextGeneralizations

Disability In Context

Employment rate for

working age people with disabilities was 27% in

January 2013.

Employment rates from US Department of Labor

Disability in Context

Compared 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

Disability in Context

People with disabilities continue to represents a

largely untapped

and diverse pool of

qualified job candidates

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 http://www.csde.umb.edu/research/survey.shtml

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: www.dol.gov

Shedding some light on Disability & Dispelling myths

Accommodations are usually very expensive…

FALSE! 50.5% of accommodations cost nothing

The average accommodation is reported as being a one time cost of

$500 or less.

Figures from the Job Accommodation Network: http://www.jan.wvu.edu/media/LowCostHighImpact.pdf

All FALS

E

Myths & Facts

People 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.http://oshkoshwdc.com/data/Studies_Related_to_the_Employment_of_Individuals_with_Disabilities.pdf

All TRUE

Myths & Facts

Employees with disabilities have shown to have equal job performance ratings to

nondisabled.

Employees with disabilities add valuable perspectives and diverse

backgrounds to companies and workgroups.

http://oshkoshwdc.com/data/Studies_Related_to_the_Employment_of_Individuals_with_Disabilities.pdf

Tax Credits and Incentives

Employment Credit Work Opportunity Tax Credit

Kentucky Specific Tax Credits

Access Credits and Deductions Disabled Access Credit Barrier Removal Tax Deduction

Tax Credits

Work Opportunity Tax Credit

(WOTC)

Work Opportunity Tax Credit (WOTC)

Provides a tax credit for employers who hire targeted low-income groups

Has been extended to cover individuals who begin to work for an employer before December 31, 2013

Includes former Welfare to Work (WTW) regualtions

Work Opportunity Tax Credit (WOTC)

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

Who is Eligible:

• Vocational Rehabilitation Referral • Qualified Ex-Felon • Supplemental Security Income

Recipient • Qualified Veterans*

Work Opportunity Tax Credit (WOTC)

*Amounts and other qualifications are different for Veteran Populations.

Long-term Temporary Assistance for Needy Families (TANF) Recipient

A 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.

Work Opportunity Tax Credit (WOTC)

Short-term (TANF) Recipient

A member of a family that received TANF benefits for any 9-month period during the 18-month period ending on the hiring date.

Work Opportunity Tax Credit (WOTC)

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.

Designated Community Resident

An 18-39 year old who lives within one of the federally designated Rural Renewal Counties or Empowerment Zones.

Work Opportunity Tax Credit (WOTC)

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.

Ex-Felons

An 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.

Work Opportunity Tax Credit (WOTC)

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 Employee

A 16 or 17 year-old youth who works for the employer between May 1 and September 15 and lives in an Empowerment Zone.

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

date

Unemployed:• At least 4 weeks• At least 6 months

Work Opportunity Tax Credit (WOTC)

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

Work Opportunity Tax Credit (WOTC)

Work Opportunity Tax Credit (WOTC)

How are credits calculated?

25% or 40% of a new employee's 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.

Work Opportunity Tax Credit (WOTC)

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.

Work Opportunity Tax Credit (WOTC)

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).

Work Opportunity Tax Credit (WOTC)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.

Work Opportunity Tax Credit (WOTC)

Other amounts (Disabled Veterans) For Veterans with a service-

connected disability hired one year from leaving service with the same qualified wages

cap ($12,000) and maximum tax credit ($4,800).

Work Opportunity Tax Credit (WOTC)

Other amounts (Disabled Veterans) For Veterans with a service-

connected disability unemployed for at least 6

months with the qualified wages cap ($24,000) and the maximum tax credit ($9,600).

Work Opportunity Tax Credit (WOTC)

Other amounts (Veterans)

For Veterans unemployed for at least 6

months with the qualified wages cap ($14,000) and the maximum tax credit ($5,600).

Work Opportunity Tax Credit (WOTC)

HOW CAN EMPLOYERS PARTICIPATE IN THE WOTC?

To receive certification that a new employee qualifies the employer for this tax credit, the employer must:

Work Opportunity Tax Credit (WOTC)

Complete page one IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, by the day the job offer is made.

Complete page two IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, after the individual is hired.

Work Opportunity Tax Credit (WOTC)

• 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.)

Work Opportunity Tax Credit (WOTC)

(ETA Form 9061 or Form 9062) Continued:

If the new employee has not been conditionally certified, the employer and/or the new employee must fill out and complete, sign and date ETA Form 9061

Work Opportunity Tax Credit (WOTC)

Mail the signed IRS and ETA forms to the employer's State Workforce Agency. 

**MAKE SURE TO MAIL FORMS IN WITHIN 28 DAYS

OF FIRST DAY ON JOB.**

Work Opportunity Tax Credit (WOTC)

All required forms and related documents must be mailed to the

following address:

WOTC Kentucky Office of Employment & Training

275 East Main Street, 2W-AFrankfort, Kentucky 40621.

Questions may be directed to program staff at 502/782-3069.

Work Opportunity Tax Credit (WOTC)

To get IRS Form 8850, the Work Opportunity Tax Credit Pre-Screening Notice and Certification Request, instructions, and ETA Forms 9061 & 9062 visit:

http://www.doleta.gov/business/incentives/opptax/wotcEmployers.cfm

Work Opportunity Tax Credit (WOTC)

More information:

Visit http://www.oet.ky.gov/ and click “employer services” then “tax credits”

Or visit http://www.doleta.gov/business/Incentives/opptax/

Use of WOTC Credit

May be used once per employee

Kentucky Tax Credits

The Unemployment Tax Credit (UTC)

The Unemployment Tax Credit (UTC)

The Unemployment Tax Credit (UTC) program provides employers a credit of $100 per eligible hire against Kentucky income taxes owed for hiring residents who have been unemployed for 60 days and remain on the payroll for at least 180 days.

The Unemployment Tax Credit (UTC)

For more information, contact WOTC Unit at 502-782-3069.

Or visit http://www.oet.ky.gov/employer/UTC_Application0507.pdf

Tax Credits and Incentives

Access Credits and Deductions

Disabled Access Credit

Barrier Removal Tax Deduction

Tax Credits

Barrier Removal Tax Deduction

• 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

Architectural/Transportation Tax Deduction

Barrier Removal Tax Deduction [Section 190, IRS Code]

Priorities for Barrier Removal

• Getting in !

• Access to goods & services

For: customers, clients, patrons

• Restrooms

• Other amenities

Key Elements

• Signage

• Parking

• Path of travel

• Entrances

• Reach

• Restrooms

Additional Elements

• Public telephones/ water fountains

• Elevators

• Meeting rooms

• Emergency procedures

• Web sites

• Specific purpose (hotel rooms, etc)

Alternatives to Barrier Removal

• Providing goods curbside

• Providing home delivery

• Retrieving merchandise from inaccessible shelves or racks

• Relocating activities to accessible locations

Tax Credits

Disabled Access Credit

Disabled Access Credit [Section 44, IRS Code]

• 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

Disabled Access Credit [Section 44, IRS Code]

• “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)

Use of Access Tax Incentives

• 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

Resources and Links

KY OET Work Opportunity Tax Credit Website

http://www.oet.ky.gov/employer/tax_credit.htm

Federal Work Opportunity Tax Credit Website

http://www.doleta.gov/business/Incentives/opptax

/

Federal ADA Tax Incentives

http://www.ada.gov/taxincent.htm Or http://www.irs.gov/businesses

Other Resources

Vocational Rehabilitation ProgramsOffice of Employment and Training

Office for the BlindCenter for Accessible Living

Veteran & VA Programs (CWT)Volunteer/Mentorship Programs

AND MORE…

Center for Accessible Living

www.calky.org

305 W Broadway, Suite 200 Louisville, KY 40202 (502) 589-6620 (v) • (502) 589-

6690 (TDD)

* * * * *

1051 N. 16th Street, Suite CMurray, KY 42071

(270) 753-7676 (v) • (270) 767-0549 (TDD)

* * * * *