Yes. Companies can claim several federal tax credits for hiring disabled workers, and they can combine those credits with a separate deduction for accessibility spending and, in many states, with wage reimbursement from vocational rehabilitation agencies. The two federal credits that do the heaviest lifting are the Work Opportunity Tax Credit, worth up to $9,600 per qualifying hire, and the Disabled Access Credit, worth up to $5,000 a year for small businesses. A Section 190 deduction covers up to $15,000 in barrier-removal costs for businesses of any size. Miss a filing deadline, though, and the benefit disappears entirely.
The Work Opportunity Tax Credit
The Work Opportunity Tax Credit under Section 51 of the Internal Revenue Code gives employers a dollar-for-dollar reduction in federal income tax based on wages paid to workers from targeted groups. Three of those groups matter for disability-related hiring: individuals with a physical or mental disability referred through a vocational rehabilitation program, people who received Supplemental Security Income at any point in the 60 days before their hire date, and veterans entitled to compensation for a service-connected disability.
The credit equals 40 percent of qualified first-year wages, but the wage cap depends on who you hired:
- Vocational rehabilitation referrals and SSI recipients: the first $6,000 in wages counts, for a maximum credit of $2,400.
- Disabled veterans discharged within the last year: the first $12,000 in wages counts, for a maximum of $4,800.
- Disabled veterans unemployed for six months or longer: the first $24,000 counts, for a maximum of $9,600.
Those maximums assume the employee works at least 400 hours. Between 120 and 399 hours, the rate drops to 25 percent. Below 120 hours, you get nothing.
You can claim the WOTC alongside other employment credits, but the same wages cannot be used to calculate more than one credit. If a year’s tax liability is too small to absorb the full amount, the unused portion carries back one year or forward up to 20 years as part of the general business credit.
Tax-exempt organizations play by tighter rules. Nonprofits can claim the WOTC only for hiring qualified veterans, and the credit runs against the employer’s share of Social Security taxes rather than income taxes.
One timing point matters right now. The current WOTC authorization covers workers who begin employment on or before December 31, 2025. Wages paid in 2026 to a worker hired in 2025 still qualify, but a start date in 2026 does not qualify unless Congress extends the credit again. Past renewals have sometimes been retroactive, so it is worth checking the legislative status before ruling anything out.
How to Claim the WOTC
The paperwork starts before the job offer, not after. The applicant and the employer must complete IRS Form 8850, the Pre-Screening Notice, on or before the day the offer is made. If you extend an offer Monday and fill out Form 8850 Tuesday, you have already missed the window.
After the hire, submit Form 8850 together with either ETA Form 9061 (Individual Characteristics Form, completed by the employer) or ETA Form 9062 (a conditional certification from a participating agency) to your State Workforce Agency. The submission deadline is the 28th calendar day after the employee starts work, and mailed submissions must be postmarked by that date. A late filing means the agency will deny certification, no matter how well the hire fits a target group.
Once certification comes back, report the credit on IRS Form 5884 and carry it to Form 3800 with your income tax return.
Documentation depends on which target group applies. Vocational rehabilitation referrals typically require confirmation from the state VR agency or a Veterans Affairs letter. SSI recipients need records showing benefits received within 60 days of the hire date. Disabled veterans generally need a DD-214 or a VA letter documenting the service-connected disability.
The Disabled Access Credit for Small Businesses
The Disabled Access Credit under Section 44 is aimed at small businesses. To qualify, a company must have earned $1 million or less in gross receipts during the prior tax year or employed no more than 30 full-time workers. Meeting either threshold is enough.
The credit covers 50 percent of eligible access expenditures that fall between $250 and $10,250, producing a maximum annual credit of $5,000. Qualifying expenses include sign language interpreters, materials in braille or other accessible formats, adaptive equipment such as screen readers or modified workstations, and removing architectural barriers in older buildings.
That last category has a limit worth watching. Barrier-removal expenses qualify only if the facility was first placed in service on or before November 5, 1990. Making a building constructed in 2005 wheelchair-accessible does not count. The date restriction applies only to physical barrier removal, though; interpreters, readers, adaptive equipment, and similar accommodations qualify regardless of when the building was built. New construction is excluded entirely, because the credit is designed for retrofitting.
The Section 190 Barrier Removal Deduction
Section 190 of the Internal Revenue Code offers a deduction, not a credit, for removing architectural and transportation barriers that limit access for individuals with disabilities. It is available to businesses of any size, and it covers work at facilities and on company vehicles.
Qualifying work includes installing ramps, widening doorways, modifying restrooms for wheelchair access, and retrofitting company vehicles with lifts or other accessibility features. The modifications must meet federal accessibility standards set by the Architectural and Transportation Barriers Compliance Board. The maximum deduction is $15,000 per year. Because a deduction reduces taxable income rather than tax owed, its dollar value is smaller than a credit of the same face amount, but it is available to businesses that are too large for the Section 44 credit or that have already maxed it out.
Combining the Credits and the Deduction
A small business that qualifies for both the Disabled Access Credit and the Section 190 deduction can use them in the same year, just not on the same dollars. Apply the Section 44 credit first to eligible expenditures between $250 and $10,250. Any accessibility spending above that ceiling can be deducted under Section 190, up to the $15,000 cap.
The WOTC operates independently of both accessibility provisions because it is based on wages rather than facility costs. A company can hire a worker with a disability, claim the WOTC on that person’s wages, claim the Disabled Access Credit for adaptive equipment at the workstation, and deduct the cost of widening a doorway under Section 190, all in the same tax year.
Vocational Rehabilitation Support
Every state runs a vocational rehabilitation agency that partners with employers to place workers with disabilities. The most concrete benefit is on-the-job training reimbursement, where the state pays back a percentage of a new hire’s wages during an initial training period. Federal guidelines cap reimbursement at 75 percent of gross wages, though the actual rate and duration are negotiated case by case. Longer agreements are typically tiered, dropping from 75 percent in the first period to 50 percent and then 25 percent before ending.
VR agencies also supply assistive technology and workplace modifications at no cost to the employer in many cases. A vocational counselor may evaluate the worksite and provide specialized keyboards, screen-reading software, or ergonomic furniture tailored to the new hire. These services sit on top of the federal tax incentives rather than replacing them, so you can accept VR-funded equipment and still claim the WOTC on the same employee’s wages.
State Tax Credits
Many states run their own credits or incentives for employers who hire workers with disabilities, separate from the federal provisions. Values vary widely, with state credits typically ranging from a few hundred dollars to $10,000 per hire depending on the jurisdiction and program design. Some states target employers who hire individuals transitioning off long-term disability benefits; others offer enhanced credits for specific industries or rural areas. Because these programs change frequently and depend on each state’s budget, the state workforce development agency is the reliable place to check current terms. State benefits can generally be stacked on top of the federal credits, which makes the combined return meaningfully larger than any single program on its own.