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Where to Find Staffing-Related Tax Incentive Information

October 15, 2000
Here are some employer tax credits and incentives you may not have known about, with links or contact information for each:

  • ADA tax credits. Small businesses are eligible for tax credits for making their workplaces more accessible through construction or removing barriers. The Job Accommodation Network is a good source of information.
  • Urban and rural "empowerment zone" tax credits. Credits against the wages of employees in certain distressed communities. The document "EZ/EC Tax Incentives: A Guide for Businesses" is pretty good but be patient as it takes a little while to download.
  • Welfare-to-Work tax credits. These relatively new incentives from the federal government are geared toward employers who hire long-term (18 months or more) welfare recipients. Substantial credits are available, especially if you keep the employee on past their first year. The Welfare-to-Work Partnership may be able to help you.
  • Work Opportunity Tax Credit (WOTC). Can reduce your tax liability up to $2,400 per employee. Employees must fit into certain categories of food stamp or welfare recipients, veterans, ex-felons, SSI recipients, employees from tough areas, and others. Congress is continually starting and stopping the WOTC, but it can be a good incentive anyhow. If you think you're going to be using it a lot, there are consultants who specialize in the WOTC who can help you.
  • Other federal incentives. As you know, there are other incentives available, for everything from child care to educational assistance. You can call the IRS at (800) 829-1040. Their Web site can be helpful. Good publications to get include Publication 535 (Business Expenses), Publication 334 (Tax Guide for Small Businesses) and Publication 553 (Annual Supplement).
  • State tax incentives. There are a variety of different tax incentives available. Among other incentives, these include tax credits for helping with child care expenses, additional welfare-to-work incentives and training incentives. For more information on state credits, try this chart, or contact your state labor department.