South Carolina
Vocational Rehabilitation Department

Enabling eligible South Carolinians with disabilities to prepare for, achieve and maintain competitive employment

Employing Ability


Tax Credits

Hiring someone with a disability can save you thousands of dollars. Find out the tax benefits for businesses accommodating persons with disabilities:

Work Opportunity Tax Credit (WOTC)

The Work Opportunity Tax Credit (WOTC) is a federally-funded tax credit program designed to provide incentive for employers to hire individuals with barriers to employment.

The Small Business and Work Opportunity Tax Act of 2007 extended the Work Opportunity Program through August 31, 2011. See the nine categories of eligibility, including individuals completing rehabilitation services through SC Vocational Rehabilitation, Dept. of Veteran Affairs or SC Commission for the Blind and SSI recipients.

The maximum credit is $2400 for most qualifying hires. In South Carolina, the SC Department of Employment and Workforce must certify the Work Opportunity Tax Credits before employers can claim them on their federal tax return. Requests must be postmarked within 28 days of the employee start date. Only those requests indicating potential target group eligibility should be mailed in.

Apply for certification by completing and submiting IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and ETA Form 9061 (PDF document; ETA Form 9061 Spanish version) The required forms and additional information may be obtained from:

SC Department of Employment and Workforce
ATTN: WOTC Unit
PO Box 1406
Columbia, SC 29202

Phone: 803-737-2588

Once certified and minimum required hours are met, the employer can claim any tax credit accumulated on their federal tax return using IRS Form 5884, Work Opportunity Tax Credit.

What are the 9 categories or groups of job seekers from whom the employer may hire?
  1. AFDC/TANF recipient

    Received AFDC/TANF 9 of the last 18 months

  2. Veteran

    Military Veteran who received Food Stamps 3 consecutive months in the last 15 months or a disabled veteran entitled to compensation for a service-connected disability AND who, during the one-year period ending on the hire date, was (a) discharged or released from active duty or (b) unemployed for a period totaling at least 6 months

  3. Food Stamp recipient

    18-39 year-old who received Food Stamps 6 consecutive months prior to and including the hire month or able-bodied adult without dependents who received Food Stamps 3 consecutive months in the past 5 months, but no longer receiving them

  4. EZ-RC-RRC resident

    18-39 year-old residing in a federally-designated Empowerment Zone, Renewal Community, or Rural Renewal Community

    RC/EZ/EC Address Locator

  5. Summer Youth

    16-17 year-old EZ/RC/RRC resident hired between May 1st thru Sept. 15th

  6. Vocational Rehabilitation referral

    Individual who is completing rehabilitation services through SC Vocational Rehabilitation Department, the Department of Veteran Affairs or SC Commission for the Blind on the date of hire or successfully completed within 2 years prior to the hire date, OR a Ticket-to-Work Participant

  7. Ex-felon

    Convicted felony offender hired within one year of conviction or release date or during Work-Release program participation

  8. SSI recipient

    Individual who received Supplemental Security Income benefits for any month during the 60 days prior to the hire date

  9. Long-term Family Assistance recipient

    Member of family that is receiving or recently received TANF for at least 18 consecutive months ending on the hiring date

Who does not qualify?
  • No tax credit can be claimed for wages paid to relatives
  • Any employer who does NOT pay federal income tax
  • No tax credit can be claimed for federally subsidized on-the-job training. However, wages paid after the subsidy expires can qualify for the credit.
  • Rehires
Documentation and Figuring the Credits

Documentation of Veteran, Vocational Rehabilitation, age and address for EZ/RC/RRC residents also is required to be submitted when applicable to the qualifying target group. The SC Department of Employment and Workforce has direct access to documentation required for other target groups.

The maximum credit is $2400 for most qualifying hires.

40% of first-year wages when employed 400 hours or more. Reduces to 25% for those employed less than 400 but at least 120 hours. Qualified wages are capped at $6,000. Exceptions are Long-term Family Assistance Recipient, Disable Veteran and Summer Youth.

  • Long-term Family Assistance Recipient

    Two year credit with 1st and 2nd year qualified wages each capped at $10,000. Second year credit increases to 50% of qualified wages. Maximum credit is $9,000 for each qualifying hire.

  • Disabled Veteran only

    Qualified wages are capped at $12,000.

  • Summer Youth

    Maximum credit is $750, 25% of first year wages. Qualified wages are capped at $3,000.

Small Business Tax Credit

IRS Code Section 44 Disabled Access Credit

Small businesses may take an annual tax credit for making their businesses accessible to persons with disabilities. Those businesses that in the previous year earned a maximum of $1 million in revenue or had 30 or fewer full-time employees are eligible.

The credit is 50 percent of expenditures over $250, not to exceed $10,250, for a maximum benefit of $5,000. The credit amount is subtracted from the total tax liability after calculating taxes.

The credit is available every year and can be used for a variety of costs such as:

  • Sign language interpreters for employees or customers who have hearing impairments
  • Readers for employees or customers who have visual impairments
  • Purchase of adaptive equipment or the modification of equipment
  • Production of print materials in alternate formats; e.g. Braille, audio tape, large print
  • Removal of architectural barriers in buildings or vehicles

The tax credit does not apply to the costs of new construction, and a building being modified must have been placed in service before November 5, 1990.

Businesses can claim the Disabled Access Credit on IRS Form 8826, Disabled Access Credit.

For more information, contact
Office of Chief Counsel, IRS
1111 Constitution Avenue, NW
Washington, DC 20224

Phone: 202-622-3110

Architectural/Transportation Tax Deduction

IRS Code Section 190, Barrier Removal

Businesses may take an annual deduction for expenses incurred to remove physical, structural, and transportation barriers for persons with disabilities at the workplace. All businesses are eligible.

Businesses may take a tax deduction of up to $15,000 a year for expenses incurred to remove barriers for persons with disabilities. Amounts in excess of the $15,000 maximum annual deduction may be depreciated.

The deduction is available every year. It can be used for a variety of costs to make a facility or public transportation vehicle, owned or leased for use in the business, more accessible to and usable by persons with disabilities. Examples include:

  • Providing accessible parking spaces, ramps, and curb cuts
  • Providing telephones, water fountains, and restrooms which are accessible to persons using wheelchairs
  • Making walkways at least 48 inches wide

The deduction may not be used for expenses incurred for new construction, or for a complete renovation of a facility or public transportation vehicle, or for the normal replacement of depreciable property.

The amount spent is subtracted from the total income of a business to establish its taxable income. In order for expenses to be deductible, accessibility standards established under the Section 190 regulations must be met.

For more information, contact
Office of Chief Counsel, IRS
1111 Constitution Avenue, NW
Washington, DC 20224

Phone: 202-622-3110

May the tax credit and tax deduction be used together?

Small businesses may use the credit and deduction together if the expenses incurred qualify under both Sections 44 and 190. For example, if a business spent $12,000 for access adaptations, it would qualify for a $5,000 tax credit and a $7,000 tax deduction.

Although both the tax credit and deduction may be used annually, if a business spends more than may be claimed in one year, it cannot carry over those expenses and claim a tax benefit in the next year.

Find more information at Reaching out to People with Disabilities