Federal Incentives

ADA Federal Tax Credit
(irs.gov/pub/irs-pdf/f8826.pdf)
This federal tax credit was created to help small businesses cover ADA-related eligible access expenditures. A business that for the previous tax year had either revenues of $1,000,000 or less or 30 or fewer full-time workers may take advantage of this credit. This federal tax credit can cover 50% of the eligible access expenditures in a year up to $10,250 (maximum credit of $5000).  In addition, the tax deduction is available to all businesses with a maximum deduction of $15,000 per year for the other costs the credit doesn’t cover. The tax deduction can be claimed for expenses incurred in barrier removal and alterations.

Federal Work Opportunity Tax Credit (WOTC)
(iowaworkforcedevelopment.gov/work-opportunity-tax-credit)
The Federal Work Opportunity Tax Credit (WOTC ) is a federal tax credit available to employers who hire eligible individuals from target groups with significant barriers to employment. Each year across the United States, employers claim more than $1 billion in tax credits under the WOTC program. WOTC reduces an employer’s cost of doing business by decreasing their federal income tax liability between $2,400.00 and $9,600.00 per employee, depending on the target group identified and hours worked during the first year of employment. For employers to earn a WOTC , the new employee must work at least 120 hours during the first year of employment and have not worked previously for the employer. Employers can claim the WOTC on an unlimited number of qualified employees each year.

The WOTC is available to employers who hire individuals from eligible target groups including:

• Veterans
• Temporary Assistance to Needy Families recipients
• Supplemental Nutrition Assistance Program recipients
• Individuals referred from Vocational Rehabilitation
• Ex-felons
• Supplemental Security Income (SSI) recipients
• Long-term Unemployment Recipients