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Tax Incentives

Tax Credits

1. Work Opportunity Tax Credit (WOTC)

The WOTC program provides employers with federal tax credits as an incentive for hiring members of targeted groups (including individuals with disabilities) who traditionally have difficulty finding jobs. Department of Workforce Service determines the eligibility of targeted workers and gives certifications to employers, who may then receive tax credits.

The full tax credit is 40 percent of up to $6,000 paid out in wages during the first twelve months of employment for new hires who work at least 400 hours.

The maximum tax credit for each individual hired is $2,400. For new hires who leave before they have worked 400 hours, a partial credit is available. If a new hire works at least 120 hours but less than 400 hours, the employer may take a partial credit of 25 percent of up to $6,000 paid out in wages.

The tax credit for the summer youth target group is limited to the first $3,000 in wages. Unused portions of the credit may be carried back three years and forward 15 years.

2. Welfare to Work Tax Credit

Employers can claim as much as $8,500 per new hire. During the first year of employment, 35% of qualified wages can be claimed, and 50% during the second year. To qualify, new hires must be employed at least 400 hours or 180 days. Claims must be filed within the first two years of start date of the new employee, to be eligible.

Wage Tax Credit Eligibility Certification. Department of Workforce Services is responsible for determining an individual’s eligibility as a member of a targeted group and providing certifications to employers. The Internal Revenue Service is responsible for allowing receipt of the tax credits. Please refer all questions and/or concerns regarding these programs and/or filing procedures to:

WOTC/WTW Specialist
(801) 526-9480 or 1-800-859-3203
shelleyroberts@utah.gov

WOTC’s Fax-On-Demand Service: By calling 1-877-828-2050 (a toll-free number), employers and other interested parties can conveniently obtain the required WOTC/WTW tax credit request forms and State contact information.
To find more information on how to apply go to following link.
www.jobs.utah.gov/employer/business/wotc.asp

3. Tax Credit for Access Improvements

The tax credit, established under Section 44 of the Internal Revenue Code, was created in 1990 specifically 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. The credit can be used to cover a variety of expenditures, including: provision of readers for customers or employees with visual disabilities, provision of sign language interpreters, purchase of adaptive equipment, production of accessible formats of printed materials (i.e., Braille, large print, audio tape, computer diskette), removal of architectural barriers in facilities or vehicles (alterations must comply with applicable accessibility standards)and fees for consulting services (under certain circumstances).

Note: The credit cannot be used for the costs of new construction. It can be used only for adaptations to existing facilities that are required to comply with the ADA. The amount of the tax credit is equal to 50% of the eligible access expenditures in a year, up to a maximum expenditure of $10,250. There is no credit for the first $250 of expenditures. The maximum tax credit, therefore, is $5,000.