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Guide to the Work Opportunity Tax Credit (WOTC) — including its lapse for new hires after 2025 — the Disabled Access Credit, and the Barrier Removal Deduction.

US Tax Credits for Hiring People with Disabilities

Work Opportunity Tax Credit (WOTC)

Overview

The WOTC provides tax credits to employers who hire individuals from targeted groups, including vocational rehabilitation referrals (people with a physical or mental disability referred to the employer while receiving or after completing rehabilitative services) and SSI recipients.

> Important — current status: The WOTC was authorised until December 31, 2025. It is available only for wages paid to individuals who began work on or before December 31, 2025. At the time of review, Congress had not reauthorised it for new hires starting after that date; check the IRS WOTC page before relying on it.

Credit Amounts

CategoryQualified First-Year WagesMaximum Credit
Vocational Rehabilitation ReferralUp to $6,000$2,400
SSI RecipientUp to $6,000$2,400

The credit is generally 40% of up to $6,000 of first-year wages. A 25% rate applies for employees who work fewer than 400 but at least 120 hours.

Eligibility Requirements

  • Employee must work at least 120 hours
  • Must be certified by the state workforce agency (designated local agency) as a member of a targeted group
  • Submit Form 8850 to the state agency within 28 calendar days of the employee's start date

Disabled Access Credit (Section 44)

For Small Businesses

Available to businesses with gross receipts of $1 million or less, or no more than 30 full-time employees, in the previous year. Covers 50% of eligible access expenditures between $250 and $10,250.

Maximum credit: $5,000 annually

Eligible Expenses

  • Removing architectural, communication, physical or transportation barriers
  • Providing qualified interpreters
  • Acquiring or modifying equipment or devices
  • Producing materials in accessible formats (for example qualified readers or taped texts)

Barrier Removal Deduction (Section 190)

For All Businesses

Deduct up to $15,000 a year for removing architectural and transportation barriers.

Combining Incentives

Businesses can combine these incentives in the same tax year if the expenses meet the requirements of both sections:

  1. Claim the Disabled Access Credit (up to $5,000 on the first $10,250 of eligible expenses)
  2. Deduct the difference between the total spent and the credit claimed under Section 190 (up to $15,000)
  3. Claim WOTC for each eligible hire (where the credit is available)

Resources

  • IRS WOTC Information: https://www.irs.gov/businesses/small-businesses-self-employed/work-opportunity-tax-credit
  • IRS Tax Benefits for Businesses with Employees with Disabilities: https://www.irs.gov/businesses/small-businesses-self-employed/tax-benefits-for-businesses-who-have-employees-with-disabilities
  • Job Accommodation Network: askjan.org

Etiquetas

employer-incentivescountry-guides
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