The Tax Incentives for Hiring Employees With Disabilities
Will your organization be looking to hire disabled employees? If so, there are a number of financial and nonfinancial benefits. Inclusion and diversity can also be financially driven values, in addition to good corporate citizenship.
There are many ways hiring employees with disabilities can help benefit your organization. Providing a job to individuals with disabilities not only helps them build a life for themselves and their families, but it also allows your organization to build a diverse and inclusive workforce. Despite the fact that almost 20 percent of the U.S. population is considered disabled, only 20 percent of disabled persons are participating in the U.S. workforce, according to the U.S. Census Bureau.
Hiring Disabled Employees: The Financial Benefits
1. Work Opportunity Tax Credit (WOTC)
Tax credits are available under the WOTC program to employers who hire and retain individuals who have historically faced barriers to employment. The credit amount an employer may claim, which ranges from $1,200 to $9,600 per eligible employee, depends on the employee's target group, the wages paid to the employee and the number of hours the employee works (typically in the first year of employment, with certain exceptions). Hiring a disabled veteran could generate one of the higher tax credit amounts available under the WOTC program.
2. Financial Assistance for On-the-Job Training of Veterans
When you hire and train a veteran or disabled veteran, you may be eligible for financial support under the Department of Veterans Affairs' (VA) Vocational Rehabilitation and Employment (VR&E) Program's On-the-Job Training Program. The program subsidizes a portion of the wages of the veteran or disabled veteran employee and will also help pay for necessary workplace tools to support the veteran employee, including making workplace equipment accessible. The VR&E can even help you find veterans or disabled veterans to hire for the jobs you have available, according to its website.
3. State Tax Incentives
Several states offer tax incentives for hiring and training disabled employees. For example, Kansas law allows an employer who spends money to make an existing facility accessible for disabled persons—including making workplace equipment accessible—to claim an income tax credit equal to half of the expenditures, or $10,000, whichever is less, notes the National Conference of State Legislatures.
According to the Job Accommodation Network (JAN), more than half of employers who hire individuals with disabilities don't need to spend any money on accommodations. Those who do only spend around $500.
Hiring Disabled Employees: Other Benefits
1. An Expanded Pool of Talent
By tapping into this population of the U.S. workforce, you can expand your pool of available talent. Yes, you may need to conduct more community outreach to organizations that help individuals with disabilities and veterans with disabilities, but this can also be part of a larger corporate social responsibility (CSR) campaign around workforce inclusion and diversity.
2. Increased Productivity
The American Association of People with Disabilities reports many positive results for employers hiring employees with disabilities and embracing diversity. These results include higher overall morale, increased productivity, innovation and an enhanced public image. Hiring individuals with disabilities can go beyond CSR and tax breaks: It could help your overall workforce with morale and productivity.
So will your organization be looking to hire disabled employees? If so, there are a number of financial and nonfinancial benefits. Inclusion and diversity can also be financially driven values, in addition to good corporate citizenship.
