Tax incentives in Utah for hiring people with disabilities may go unnoticed

Story and photos by DYLAN LIERD

Federal and state tax credits aim to help Utah businesses hire people with disabilities. However, many companies may be unaware of the incentives that also strive to reduce the number of unemployed Utahns with disabilities.

Work Ability Utah, located at 1595 W. 500 South in Salt Lake City, advocates for unemployed Utahns with disabilities.

Work Ability Utah, located at 1595 W. 500 South in Salt Lake City, advocates for unemployed Utahns with disabilities.

According to Work Ability Utah, an organization that links employers with the workforce of people with disabilities, tax credits such as the Work Opportunity Tax Credit and the Utah Targeted Job Tax Credit are available for all businesses who are willing to hire Utahns with disabilities. But Carol Rudell, project director for Work Ability Utah, said not enough businesses are taking advantage of these credits.

“I see businesses that are perfectly willing to hire people with disabilities, but there are others that don’t know about the incentives,” Rudell said. “I see a lot of misses out there and a lot of stereotypes that are not true, and when people have more information they are more than happy to hire people with disabilities.”

The Work Opportunity Tax Credit is a federal tax credit that is designed to encourage cooperation with the Americans with Disabilities Act. According to Work Ability Utah’s website, businesses can earn an annual tax credit of $2,400 per hired person with a disability. Businesses can also earn a $9,000 yearly tax credit when hiring a disabled veteran. To receive these incentives, businesses must complete the Internal Revenue Service Form 8850 and the Employment and Training Administration Form 9061.

Businesses can also receive state tax credit by applying for the Targeted Job Tax Credit. According to the Utah State Tax Commission’s website, the purpose of its creation is to entice companies to hire people with disabilities in order to foster an integrated workforce.

The allotted credit minimizes the amount of income tax the business has to pay, and the amount of money the company receives is based on the salary paid to employed individuals. The maximum credit given is $3,000 per employee per year. This is a credit that can be received for the first two years that the person with a disability is employed. Companies are also not limited by the amount of individuals they can claim under the Targeted Job Tax Credit.

The Division of Services for People with Disabilities ensures the rights of Utahns with disabilities. DSPD is located at 195 N. 1950 West
 in Salt Lake City.

The Division of Services for People with Disabilities ensures the rights of Utahns with disabilities. DSPD is located at 195 N. 1950 West
 in Salt Lake City.

In order to apply for these services, the person with the disability must be eligible for services from the Division of Services for People with Disabilities. Businesses must then complete a TC-40HD form and have it approved by an authorized representative from DSPD.

Tricia Jones-Parkin is the program administrator for DSPD. She is the authorized person who accepts these tax credit forms. Jones-Parkin is tasked with training job coaches and approving businesses that apply for the Targeted Job Tax Credit. Job coaches are responsible for teaching employers how to professionally treat people with disabilities, and how employers can receive tax credits by hiring Utahns with disabilities. However, she said more businesses should be taking advantage of The Targeted Job Tax Credit.

“I haven’t received a single form turned into me this year,” said Jones-Parkin in a phone interview. “When I do training for job coaches, I tell them to tell businesses about the Targeted Job Tax Credit, but there is still not many businesses that do.”

Jones-Parkin also said that nationally, people with disabilities are the most under employed demographic. In Utah, the state is not doing much better than the national average.

According to the Department of Labor’s website, the unemployment rate for people with disabilities is 13.1 percent. This is more than double the unemployment rate for people without disabilities, which is 6.8 percent. That is why Jones-Parkins said that beyond the tax credits that Utah businesses receive, it is important to hire Utahns with disabilities in order to reduce this number.

In Utah, the Governor’s Committee on Employment of People with Disabilities works to advocate the importance of hiring people with disabilities to employers.

Leslee Hintze, executive director for the Governor’s Committee, said its members speak to employers about the tax benefits for hiring people with disabilities in order to entice businesses to hire these individuals.

“Once we advocate tax incentives to employers who have a tendency to say, ‘I don’t know if I can take this on,’ they are more likely to hire and continue to hire people with disabilities,” Hintze said in a phone interview. “Businesses really find out that they are great employees, they make the workplace better and they really do a lot for the business they are working for.”

According to the Committee’s website, businesses will also not see their Worker’s Compensation Insurance or Medicaid Insurance rates rise when they hire people with disabilities. Regardless of the incentives, Hintze said it also benefits the U.S. economy to hire people with disabilities so they can contribute financially to society.

“People with disabilities can give back tenfold by becoming taxpayers, which means they will become tax producers and not tax users,” Hintze said. “A country that does not take care of its least fortunate citizens, to me is pretty deplorable. It is a moral imperative, which is why businesses should be looking for opportunities like these because everyone will benefit.”