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MAY 1998

Employers can earn federal, state tax credits for hiring disabled workers

New York State employers can hire good workers and lower their taxes in the process thanks to two tax credits designed to encourage the hiring of individuals with disabilities.

There are two tax credits, one federal and one state, available to businesses that hire disabled workers.

The federal Work Opportunity Tax Credit Program (WOTC) provides a credit against federal corporate income taxes of up to $2400 for companies that hire individuals from eight targeted groups, including disabled workers.

The state Workers with Disabilities Employment Tax Credit program makes possible an additional tax credit of $2100 against a business's state taxes for each disabled worker hired. This credit applies only to disabled workers.

The federal tax credit is applied to taxes paid for the employee's first year of employment. The state tax credit must be applied to taxes paid for the disabled employee's second year. For this reason, New York State employers may be able to apply the credit this year for employees hired on or after Jan. 1, 1997.

"As New York's business climate improves, the need for skilled, dedicated workers increases," said Daniel B. Walsh, president of The Business Council.

"As many business sectors report worsening shortages of workers, it is more important than ever for business to be aware of this pool of talented workers-and of the tax benefits available under the Workers with Disabilities Employment Tax Credit for hiring them."

To use these credits, employers must hire workers deemed eligible by either of two state agencies. The eligibility procedure for the Work Opportunity Tax Credit program applies to both the federal and state tax credit programs

The workers approved are those who have received services from the approving state agencies: the state Education Department's Office of Vocational and Educational Services for Individuals with Disabilities (VESID); and the Office of Children and Family Services' Commission for the Blind and Visually Handicapped (CBVH).

VESID and CBVH will work with employers to reduce recruitment and training costs. Both agencies provide a variety of services, including job training and work try-outs, to facilitate employers participation in the Workers with Disabilities Employment Tax Credit program.

Interested employers should contact VESID at 1-800/222-JOBS or CBVH at 518/474-6812 or visit http://www.vesid.nysed.gov/.

May 28, 1998