Tax incentives for employers are designed to encourage businesses to engage in certain activities or hire specific groups of individuals. These incentives can help reduce the overall tax liability for employers while promoting social and economic goals. Here are some common tax incentives available for employers in the United States:
- Work Opportunity Tax Credit (WOTC)
The WOTC is a federal tax credit available to employers who hire individuals from targeted groups that face significant barriers to employment. These groups include:
- Veterans
- Long-term unemployed
- Ex-felons
- TANF recipients (Temporary Assistance for Needy Families)
- SNAP recipients (Supplemental Nutrition Assistance Program)
- Vocational rehabilitation referrals
- Other designated groups
The credit amount can vary depending on the employee’s target group, the number of hours worked, and the wages earned, but it can range from $1,200 to $9,600 per eligible employee.
- Disabled Access Credit
This credit is available to small businesses that incur expenses to provide access to persons with disabilities. Eligible expenditures include modifying facilities, acquiring or modifying equipment, and providing interpreters or other services.
The credit covers 50% of eligible expenditures over $250, up to a maximum credit of $5,000 per year.
Conclusion
These tax incentives are designed to support various policy goals, such as reducing unemployment among disadvantaged groups, promoting education and training, enhancing workplace accessibility, and improving employee benefits. Employers should consult with a tax professional or financial advisor to determine their eligibility for these incentives and how to effectively integrate them into their business strategies.