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Tax Credits and Deduction Incentives for Employers
The following tax credits and deductions are available to
businesses that employ and/or accommodate individuals with disabilities.
Additional state tax credits may be available.
As tax credits and deductions are subject to yearly change, be sure to contact the Internal Revenue Service for current information. Internal Revenue Service - 1-800-829-1040 or 1-800-829-4059 (TTY)
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The Work Opportunity Tax Credit (formerly known as the Targeted Jobs Tax Credit) encourages employers to hire workers from nine targeted groups of job seekers by reducing the employer's Federal tax liability by as much as $2,400 for each new hire during the person's first year of work. The tax credit is 40 percent of the first $6,000, or $2,400 in wages paid the first 12 months for each new hire. Job seekers who may qualify include:
This credit is subject to yearly Congressional renewal. For specific qualification information and instructions for employers, see: IRS Form 8850 Instructions (PDF) IRS Forms, Instructions and Publications For additional information, visit these web sites: Work Opportunity Tax Credit Information and Instructions - Oregon Department of Revenue
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The Welfare-to-Work Tax Credit encourages employers to hire long-term welfare recipients by reducing the employers' Federal tax liability by up to $8,500 for each new hire during the worker's first two years of employment. Job seekers who qualify include:
For specific qualification information and instructions for employers, see: IRS Form 8850 Instructions (PDF) IRS Forms, Instructions and Publications For additional information, visit this web site:
The Disabled Access Credit provides an annual tax credit for small businesses that incur expenses through compliance with the Americans with Disabilities Act (ADA) of 1990. Eligible small businesses are those that earned a maximum of $1 million in revenue the previous year or had 30 or fewer full-time employees. In addition, employers may deduct costs of removing barriers to employment for people with disabilities and the elderly. Examples of expenses would include:
The credit is 50 percent of expenditures over $250, not to exceed $10,250, for a maximum benefit of $5,000. The credit is available every year. The credit does not apply to new construction, and a building being modified must have been placed in service before November 5, 1990. For more information, see: IRS Disabled Access Credit - Form 8826 and Instructions (PDF)
The U.S. Department of Labor's Employer Incentives Publication - Appendix C
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This deduction is an allowance for costs associated with removing barriers to the disabled and the elderly. Any business can take an annual deduction for expenses incurred for making a facility or public transportation vehicle more accessible and usable by people with disabilities and the elderly. Businesses may take a tax deduction of up to $15,000 a year for expenses incurred to remove barriers. Amounts in excess of the $15,000 maximum annual deduction may be depreciated. Examples might include the cost to:
Accessibility standards, established under IRS Section 190 regulations, must be met for expenses to be deductible. Expenses not covered would be costs incurred for new construction, a complete renovation of a facility or public transportation vehicle, or the normal replacement of depreciable property. For further information, see:
The U.S. Department of Labor's Employer Incentives Publication
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The following programs may be subject to change. Contact the Oregon Department of Revenue for current information.
The Oregon First Break Program provides an Oregon State tax credit for Oregon employers who hire targeted youth that face significant barriers to employment, including youth with disabilities. The Program authorizes a tax credit for wages paid to each eligible youth hired. The program is administered by the Oregon Employment Department and is operated by community-based organizations approved by the Oregon Employment Department. For further information, see: Oregon First Break Program - Oregon Employment Department
Oregon's Preferred Worker Program enables employers who maintain Oregon workers' compensation insurance to not pay workers' compensation insurance premiums on a Preferred Worker for up to three years from the date the worker starts work. A Preferred Worker is an employee with a permanent disability as a result of a disabling compensable injury or disease sustained on the job in Oregon. The employer receives 50 percent wage reimbursement for the Preferred Worker for six months. Job modifications are limited to $25,000 on the claim. The following web site provides other program benefit information. For further information, see: Oregon's Preferred Worker Program - Oregon Workers' Compensation Division
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The following companion bills were introduced during the 2002 session:
To check the status or read the text of these bills, see: Washington State Legislative Web Site
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