Employers are always looking for smart ways to reduce their expenses while staying within federal regulations. Luckily, the U.S. government is aware of this fact and offers many tax incentives for businesses to take advantage of. These rewards often benefit both parties. Surprisingly, many companies may be unaware of what extra assistance is provided for them. Let’s take a look at some examples all organizations should know:
Work Opportunity Tax Credit
This federal tax credit is available to companies that hire people from certain targeted groups whose members face difficulties finding employment, according to the U.S. Department of Labor. These individuals include:
- Unemployed and disabled veterans.
- Food stamps recipients.
- Temporary assistance for needy families recipients.
- Supplemental security income recipients.
- Vocational rehabilitation referred individuals.
- Summer youth employees.
- Designated community residents.
The incentive ranges from $1,200 to $9,600, depending on the worker hired. The goal of this credit is to help employees reach a state of self sufficiency after a period of economic dependency. Businesses, as a result, are able to reduce their income tax liability.
“Employers that alter their workplace to assist employees with disabilities can receive a tax deduction.”
Architectural/Transportation Tax Deduction
This deduction is open to private-sector business that make structural changes or other accommodations to their workplace to assist employees and customers with disabilities. Companies of all sizes can receive a $15,000 incentive for alterations including widening walkways, installing ramps and curb cuts and creating accessible telephones, bathrooms, water fountains and parking.
Employees want to find a company that values their future career development. Sometimes, this means workers need additional education and resources to continue their growth. Employers can receive tax breaks on the federal level by providing tuition reimbursement, according to The Houston Chronicle. After passing a series of tests which prove organization’s’ eligibility for this benefit, companies can deduct up to $5,250 on their annual tax returns. Business owners can write off their own educational reimbursement if it’s related to their current trade, occupation or company.
Federal Indian Employment Credit
This tax break incentivizes employers to hire certain individuals who live on or near Native American Indian reservations. According to the IRS, employees who qualify companies for this credit include:
- An enrolled member of an Indian tribe or the spouse of an enrolled member of an Indian tribe.
- An employee who performs the majority of his or her services for an employer within an Indian reservation.
- An employee who has his or her main home on or near an Indian reservation while performing those services.
Employers looking to broaden the diversity of their workplace, while reducing their overall expenses should be familiar with federal tax incentives. Although this list only includes federal breaks, companies should also educate themselves on other state and local deductions that can further improve their savings.