Tax and Other Incentives

Transition to Employment Office: Graduates with Disabilities EMPLOYMENT INCENTIVES Congress has enacted several tax credits, deductions and other incentives to help promote employment opportunities for individuals with disabilities. Most of the incentives designed to help businesses remove barriers and provide accommodations for employees and customers with disabilities. Employment goals for individuals with disabilities are advanced through tax incentives, disability-related deductions, health insurance buy-ins, and matched savings programs. Employment Incentives for: EMPLOYERS  Disabled Access Credit (IRS Code Section 44) This tax credit applies to eligible small businesses that incur expenses related to providing access for persons with disabilities in compliance with the Americans with Disabilities Act of 1990 (ADA). The tax credit was created to specifically 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 format, Electronic Format) Removal of Architectural Barriers in Facilities or Vehicles (Alterations must comply with applicable Accessibility Standards) Fees for consulting services (under certain circumstances) Note: The credit cannot be used for the costs of new construction , and a building being modified must have been placed in service before November 5, 1990. 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. Forms: Procedure: IRS Form 8826 Complete the one page IRS Form 8826 along with regular business tax forms, to be filed for the calendar year in which expenditures were incurred. Department of labor http://www.dol.gov/odep/pubs/ek97/tax.htm More Info: BDP4/2007 Transition to Employment Office: Employment Incentives p. 2  Architectural or Transportation Barrier Removal Tax Deduction (IRS Code Section 190) Businesses may take this deduction for making a facility or public transportation vehicle more accessible to and usable by persons who are disabled or elderly. The Architectural/Transportation Barrier Removal Tax Deduction allows businesses an annual deduction of up to $15,000 for expenses incurred to remove physical, structural, and transportation barriers for persons with disabilities at the workplace. The tax deduction is a maximum of $15,000 per year. A business (including active ownership of an apartment building) of any size may use this deduction for the removal of architectural or transportation barriers. In order to be deductible, applicable renovations must comply with applicable accessibility building code standards. Forms: Procedure: None 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. If the business meets income eligibility, the tax credit and deduction can be used annually. You may not carry over expenses from one year to the next and claim a credit or deduction for the portion that exceeded the expenditure limit the previous year. However, if the amount of credit you are entitled to exceeds the amount of taxes you owe, you may carry forward the unused portion of the credit to the following year. Note: The tax credit can be used for architectural adaptations, equipment acquisitions, and services such as sign language interpreters. The tax deduction can be used for architectural or transportation modifications. Small businesses can use these incentives in combination if the expenditures incurred qualify under both Section 44 and Section 190. For example, a small business that spends $20,000 for access adaptations may take a tax credit of $5000 (based on $10,250 of expenditures), and a deduction of $15,000. The deduction is equal to the difference between the total expenditures and the amount of the credit claimed. For example:    $20,000 cost of access improvements (rest room, ramp, 3 doors widened) $5,000 maximum credit $15,000 remaining for deduction IRS Publications 535 and 334, or Form 8826 to claim your tax credit. IRS Publications or Forms: 800/ 829-3676 (Voice) or 800/ 829-4059 (TTY) To ask the IRS a question: 800/ 829-1040 (Voice) or 800/ 829-4059 (TTY) http://www.dol.gov/odep/pubs/ek97/tax.htm More Info: Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 3  Work Opportunity Tax Credit (Small Business Job Protection Act of 1996) The Work Opportunity Tax Credit (WOTC) is a federal income tax credit that can save employers up to $2,400 if they hired someone who is a member of one of eight targeted groups, which have traditionally faced significant barriers to employment. WOTC applies only to new employees hired between December 31, 2003 and December 31, 2005. An employer that hires someone from one of the following groups may qualify for the WOTC:  A veteran who has received food stamps for at least 3 consecutive months in the 15 months prior to the date of hire  An ex-felon who has been convicted or released from prison within one year of the date of hire AND is a member of a low-income family  An 18-24 year-old resident of a federally designated Enterprise Community  A disabled person who has been referred by the Department of Vocational Rehabilitation and has completed or is completing rehabilitative services from the State or the Veteran's Administration  A 16-17 year-old resident of an Enterprise Community hired as a Summer Youth Employee between May 1 and September 15  An 18-24 year-old food stamp recipient who has received food stamps for at least 6 consecutive months prior to the date of hire OR for at least 3 of the last 5 months, if able-bodied adult without dependents AND their food stamp eligibility has expired due to the work requirements  A Supplemental Security Income recipient who has received benefits for any month in the 60-day period prior to the date of hire.  A member of a family that is receiving or recently received Temporary Assistance to Needy Families (TANF) or Aid to Families with Dependent Childern (AFDC). Employers can claim up to 40% of the first $6,000 in qualified first-year wages for a maximum credit of $2,400 per new hire. Qualified wages are capped at $6,000 for all WOTC target groups except Summer Youth, whose wages are capped at $3,000. Schedule of WOTC tax credit:  1-119 hours = No Credit  120-399 hours, 25% of first $6,000 in wages = $1,500  400+ hours, 40% of first $6,000 in wages = $2,400 Participation in the program is voluntary. Employees are not required to provide this kind of information to an employer. Therefore, the employers must first determine whether the applicant is willing to provide the information. Forms: IRS Form 8850 ETA Form 9061 or Form 9062 Procedure: 1. Complete IRS Pre-Screening Notice and Certification Request form 8850 before making the job offer. Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 4 2. Complete all information requested on either a Conditional Certification Form (ETA Form 9062) provided by the employee or an Individual Characteristics Form (ETA Form 9061), including original signatures. These forms must be received by IDES, either mailed or hand-carried, not later than the 28th day after the individual begins work for the employer. 3. Mail/deliver all forms to your nearest IDES office. Chicago Region 527 South Wells, 3rd Floor Chicago 60607 (312) 814-3143 Northern Region 260 East Indian Road Aurora 60505 (630) 844-8455 Central Region 850 E Madison FL 1 Springfield 62702-5603 (217) 558-2469 More Info: Chicago - Metro South 8630 South Pulaski Avenue Chicago 60652 (773) 838-5707 Northwest Region 410 Elm Street Peoria 61605 (309) 671-3157 Southern Region 403 North 42nd Street Mount Vernon 62864 (618) 242-6121 Illinois Department of Employment Security: 800/ 247-4984 http://www.dol.gov/odep/pubs/ek97/tax.htm Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 5  Welfare-to-Work Tax Credit (Taxpayer Relief Act of 1997) The Welfare to Work Tax Credit is a federal income tax credit that can save employers up to $9000 over a two-year period when they hire long-term welfare recipients. New hires must have received Temporary Assistance to Needy Families (TANF) for at least 18 consecutive months prior to the date of hire or a total of 18 months since August 1997. New hires must also have been hired within 2 years following the earliest 18-month period of receipt of TANF benefits to qualify. Employers can claim 35% of the qualified wages for the first year of employment, if employed at least 400 hours or 180 days, and 50% for the second year. Qualified wages are capped at $10,000 per year with a maximum first year credit of $3,500 and $5,000 for the second year - a maximum total (two year) tax credit of $8,500 per new hire. Qualified wages include tax-exempt amounts received under accident or health plans, educational assistance programs, and dependent assistance programs. Schedule of Welfare to Work tax credit:  1-399 hours = No Credit  Minimum of 400 hours or 180 days each year: o First year, 35% of first $10,000 in wages = $3,500 o Second year, 50% of first $10,000 in wages = $5,000 Participation in the program is voluntary. Employees are not required to provide this kind of information to an employer. Therefore, the employers must first determine whether the applicant is willing to provide the information. Forms: IRS Form 8850 ETA Form 9061 or Form 9062 Procedure: 1. Complete IRS Pre-Screening Notice and Certification Request form 8850 before making the job offer. 2. Complete all information requested on either a Conditional Certification Form (ETA Form 9062) provided by the employee or an Individual Characteristics Form (ETA Form 9061), including original signatures. These forms must be received by IDES, either mailed or hand-carried, not later than the 28th day after the individual begins work for the employer. 3. Mail/deliver all forms to your nearest IDES office. Chicago Region 527 South Wells, 3rd Floor Chicago 60607 (312) 814-3143 Chicago - Metro South 8630 South Pulaski Avenue Chicago 60652 (773) 838-5707 Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 6 Northern Region 260 East Indian Road Aurora 60505 (630) 844-8455 Central Region 850 E Madison FL 1 Springfield 62702-5603 (217) 558-2469 More Info: Northwest Region 410 Elm Street Peoria 61605 (309) 671-3157 Southern Region 403 North 42nd Street Mount Vernon 62864 (618) 242-6121 Illinois Department of Employment Security: 800/ 247-4984 http://ows.doleta.gov/employ/wtw.asp Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 7  Veterans Job Training Act (38 U.S.C.501(a),3100-3121 (1944)) This provides training costs for employers of Veterans who have service-connected disabilities and are determined (by the Department of Veterans Affairs) to have an employment disability. Hiring a veteran as an On-The-Job Trainee can benefit employers in many ways:  Reduced labor and training costs. o Reduced salary costs. The VA can supplement a training wage, by paying a portion of the difference between actual and journeyman pay the directly to the veteran. Up to six months (nine months with special approval). o Reduced Social Security, unemployment compensation and workman's compensation costs due to the fact these are based on the salary the employer actually pays. o VA assists in payment of cost of additional training needed Training can be up to 24 months, or longer, if approved as an apprenticeship program Needed tools and equipment are supplied by the VA VA can assist in cost of necessary job accommodation VA professionals are available for consultation during the training program Low risk trial work period. An opportunity for employer to view veteran's skills and abilities. Minimal paperwork and employer involvement.      In addition employers hiring a disabled veteran through the VA Vocational Rehabilitation program may receive monetary compensation. Up to 50% of a veteran's salary can be paid to an employer for indirect expenses related to program costs e.g. operation losses because of time spent training new employee. Forms: Procedure: Provided by VA counselor Employers can contact the Veterans Administration to be connected with the nearest Regional Office. Ask to speak with the Employment Specialist or a Vocational Rehabilitation & Employment Officer. Veterans Administration 800/ 827-1000 http://www.vba.va.gov/bln/vre/employer_incentives More Info: Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 8  Mentor-Protégé Program (Department of Defense, P.L. 102-172, Section 8064A) Small disadvantaged businesses, qualifying organizations employing the severely disabled, womenowned small businesses, service-disabled veteran-owned small business, or historically underutilized business zones who subcontract work from a prime contractor to the U.S. Department of Defense may receive technical assistance in areas such as production, management, financing, etc. The prime contractor (the mentor) is reimbursed by the federal agency for the costs of the technical assistance provided to the protégé. Mentors are reimbursed, dollar for dollar, for direct (e.g., providing developmental assistance) and indirect (travel and subsistence, incidental supplies and materials) costs, and up to 10% of total contract value for protégé, or for Credit, whereby the mentor receives from two to four times the cost of assistance provided to the protégé in credits toward the mentor‟s sub-contracting goals. Forms: Procedure: 1. The first act of participation for either party, Mentor or Protégé, is to find a counterpart. 2. Once a suitable partner is located the requirements of the Program must be met (see above in Eligible Users). 3. When these requirements have been met the mentor must complete the Mentor Application (see above in Forms), that is if they are not already a mentor, and submit it prior to the agreement. 4. Upon submitting the Mentor Application the two parties should commence talks discerning what both hope to accomplish through the agreement, setting goals for themselves. 5. Next, both parties submit the Mentor-Protégé Agreement Application (see above in Forms). 6. In addition, in accordance with DFARS Appendix I-111, both a mentor and protégé firm must report on the progress made under active mentor-protégé agreements semiannually and the protégé firm must report on the progress made under the Mentor-Protégé Agreement annually. The protégé firm is also required to provide data on the firm for 2 fiscal years after the expiration of the Program participation term (see above in Forms). More info: Department of Defense http://www.acq.osd.mil/osbp/mentor_protege/index.htm Mentor Agreement Template, Protégé Agreement Template, Semi-Annual Report Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 9  Employment Network Cash Provisions (Ticket to Work and Work Incentives Improvement Act, Public Law 106-170, enacted 1999) The Employment Network (EN) provides services to individuals with disabilities who receive Social Security benefits to enable them to obtain or advance in employment to the extent that they no longer receive SSA benefits (SSDI or SSI), (Medicaid/Medicare may continue). An EN can consist of individual business entities or consortia of business entities or organizations. Once the Ticket-holder (beneficiary) achieves “substantial gainful activity”, the EN receives a monthly cash reimbursement of 40% of the average national monthly SSDI or SSI benefit payments ($378 and $218 in 2007). So long as the individual is employed at this salary or wage level the EN receives the cash payment. This may continue up to 60 months. In 2007 monthly cash reimbursements to an Employment Network (for a former SSDI beneficiary) can total $22,680 over the 60 months of Ticket eligibility. Monthly cash reimbursements to an Employment Network (for a former SSI beneficiary) can total $13, 080 over the 60 months of Ticket eligibility. Monthly cash reimbursements for dual beneficiaries (former recipients of both SSDI and SSI) will be paid at the SSDI rate. Forms: Approved application as an Employment Network (EN); Individual Work Plans for Ticket Users; Annual Reports Procedure: 1. Tickets-to-Work SSA beneficiaries can request or will eventually receive a Ticket. 2. The Ticket holder then selects an approved Employment Network and “assigns” his/her ticket to that EN. 3. The beneficiary and the EN then agree upon an Individual Work Plan, which details the services that the EN will provide to that beneficiary in return for assignment of the Ticket. 4. The Individual Work Plan must be approved by Maximus, Inc., the Program Manager for the Social Security Administration. 5. The beneficiary receives services such as training and employment preparation, and then obtains employment. The EN continues to provide employment support for the 1 month of the Ticket eligibility. 6. When the beneficiary‟s Social Security benefits cease due to his or her earned income, the Employment Network files for the monthly cash reimbursement. 7. If the EN is a consortium, and more than one business entity or organization has provided services, the monthly cash reimbursement may be divided between them pre prior agreement. More Info: Maximus, Inc. http://www.yourtickettowork.com/ Social Security Administration http://www.ssa.gov/work Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 10 Employment Incentives for: INDIVIDUALS WITH DISABILITIES  Medical Expense Deduction (IRC Section 213) Employees with disabilities can include non-reimbursed costs of medical equipment or costs for removing barriers as a "health care" deduction on the long form of their personal federal income tax. Section 213 allows a deduction for out-of-pocket expenses paid during the taxable year, not covered by insurance, for medical care of the taxpayer, spouse, or dependent, to the extent the expenses exceed 7.5 percent of adjusted gross income. Medical care means the diagnosis, cure, mitigation, treatment, or prevention of disease; treatments affecting any part or function of the body; the amount paid during the taxable year for prescribed medicine, drugs, or insulin; transportation costs of a trip primarily for and essential to medical care; and qualified long-term care services. Also deductible are capped expenses for medical insurance (including amounts paid as premiums under part B of title XVIII of the Social Security Act and Medicare Part D premiums) covering medical care referred to in subparagraphs (A) and (B) or for any qualified long-term care insurance contract. Certain expenses related lodging necessary for treatment are also allowed. The medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Expenses merely beneficial to the individual‟s general health are not deductible. Medical care does not include cosmetic surgery or other similar procedures, unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease. Section 213(d)(9)(A). Cosmetic surgery means any procedure that is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. Section 213(d)(9)(B). For example, A's cancer is a disfiguring disease because the treatment results in the loss of A's breast. Accordingly, the breast reconstruction surgery ameliorates a deformity directly related to a disease and the cost is an expense for medical care within the meaning of § 213(d) that A may deduct under Section 213 (subject to the limitations of that section). The cost of B's laser eye surgery is allowed under Section 213(d)(9) because the surgery is a procedure that meaningfully promotes the proper function of the body. Vision correction with eyeglasses or contact lenses qualifies as medical care. See Rev. Rul. 74-429, 1974-2 C.B. 83. Eye surgery to correct defective vision, including laser procedures such as LASIK and radial keratotomy, corrects a dysfunction of the body. Accordingly, the cost of the laser eye surgery is an expense for medical care within the meaning of § 213(d) that B may deduct under § 213 (subject to the limitations of that section). Medical Expense Deduction (continued) Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 11 In contrast, a teeth-whitening procedure does not treat a physical or mental disease or promote the proper function of the body, but is directed at improving C's appearance. The discoloration is not a deformity and is not caused by a disfiguring disease or treatment. Accordingly, C may not deduct the cost of whitening teeth as a medical expense. Section 213(d)(3) defines a prescribed drug as a drug or biological that requires a prescription of a physician for its use by an individual. Some item fall into a grey zone; depending upon why they were utilized, they may or may not be deductible. These include equipment such as crutches, supplies such as bandages, and diagnostic devices such as blood sugar test kits. Amounts paid by an individual for equipment, supplies, or diagnostic devices may be expenses for medical care deductible under Section 213 (subject to the other limitations of that section). Forms: More Info: 1040A, 8853 Internal Revenue Service http://www.irs.gov/ IRS Publications: 502: 524: 553: 554: Medical and Dental Expenses (2006) Credit for the Elderly or the Disabled (2006) Highlights of 2006 Tax Changes (2007) Older Americans' Tax Guide (2006) Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 12  Earned Income Tax Credit (EITC) The Earned Income Tax Credit (EITC), sometimes called the Earned Income Credit (EIC), is a refundable Federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. The credit reduces the amount of Federal tax owed and can result in a refund check. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. Income and family size determine the amount of the EITC. To qualify for the credit, for 2007, earned income and adjusted gross income (AGI) must each be less than: $37,783 single with two or more qualifying children ($39,783 if married, filing jointly); $33,241 single with one qualifying child ($35,241 if married, filing jointly); $12,590 single with no qualifying children ($14,590 if married, filing jointly). Tax Year 2007 maximum credit: $4,716 with two or more qualifying children; $2,853 with one qualifying child; $428 with no qualifying children. Investment income must be $2,900 or less for the year. The maximum Advance Earned Income Tax Credit (AEITC) for TY 2007 the employer is allowed to provide throughout the year with the employee's pay is $1,712. Some employees with at least one child living with them may be entitled to receive advance EITC payments in their paychecks. The employee must file Form W-5, Earned Income Credit Advance Payment Certificate, with an employer to receive the advance payments. The employer then pays part of the credit to the employee in advance throughout the year. The taxpayer claims the rest when filing the 2006 Federal tax return. The EITC does not generally affect eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, or low-income housing. Forms: Procedure: Taxpayers may figure the EITC themselves, have the IRS figure the EITC by following instructions on page 21 of Publication 596, use the services of a tax professional, or get assistance from a Volunteer Income Tax Assistance (VITA) site. 1. The EITC Eligibility Checklist on the last page of IRS' Publication 596, Earned Income Credit, may be used to quickly determine eligibility for the credit. 2. The taxpayer may figure the credit by using a special worksheet included as part of the EITC instructions in the 1040, 1040A, and 1040EZ tax packages. 3. Instructions in these packages require some taxpayers to use a worksheet in Publication 596 instead of the worksheet in the tax package. More Info: Volunteer Income Tax Assistance (VITA) 800/ 829-1040 http://www.irs.gov/index.html 1040, 1040A, and 1040EZ tax packages. Publication 596 worksheet Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 13  Individual Development Accounts (Welfare Reform Act of 1996 and the Assets for Independence Act) An Individual Development Account (IDA) is a special matched savings account for people with low incomes. That means that you can receive another dollar or more for every dollar you save in an IDA. Typically, IDA savings and match money can be used to buy a house, pay for education, or start a small business. In addition to earning match dollars, IDA participants will learn about budgeting, saving, banking and more. In most cases, IDA account holders are required to attend financial education classes. Account holders may also receive one-on-one counseling and other training. IDAs are offered through partnerships between local non-profit organizations and financial institutions (IDA sponsors). The IDA sponsor recruits participants, provides financial education classes, and may provide one-on-one counseling/training to participants. The IDA participant opens an account with a partnering bank or credit union who handles all transactions. Each month, IDA participants receive a report telling them how much money (individual savings + match + interest) their IDA has accumulated. IDA programs match each dollar you save with additional funds from donors. Most programs offer a 2:1 match rate, which means that for each $1 account holders deposit in their IDA, $2 in matching funds are added. Match rates can be more or less than $2 for each dollar saved. Match funds cannot be withdrawn without the approval of the IDA sponsor. An IDA program can be as short as one year or as long as five years. IDA participants are allowed to withdraw money as soon as their savings goal is reached, with the approval of their IDA sponsor. Some IDA participants choose one big savings goal, such as a home, but others save for a number of related goals; home repairs, computers, automobiles, or retirement in addition to text books and college tuition. Forms: Procedure: There are more than 500 IDA programs in the United States and no two programs are exactly alike. The length of the program, amount of matching dollars provided, allowable uses for savings and other rules may be different from one program to the next. 1. The first step is to find a program close to where you live. The fastest way to do this is look up the program closest to you on the IDA Program Directory located at http://idanetwork.cfed.org (IDA website). Contact the sponsor(s) closest to you to find out more about their IDA programs, any questions you may have and how to apply. 2. Before enrolling in an IDA program potential applicants should review the IDA sponsor‟s eligibility guidelines. These may be based on all or some of the following:  Income: Most IDA programs specify a maximum household income level for IDA applicants. Maximum income levels are most often a percentage of the federal poverty guidelines (usually between 100% and 200%) or the area median income(usually between 65% and 85%).1 1 Each IDA sponsor has their own forms. The U.S. Department of Health and Human Services (HHS) is responsible for determining and reporting annual federal poverty guidelines. The U.S. Department of Housing and Urban Development (HUD) is responsible for determining and reporting annual area median income figures. Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 14    Earnings: Many IDA programs require that all or part of savings come from earned income. A paycheck is the most common source of earned income, but welfare, disability, social security, or unemployment checks are also earnings. Money given as a gift is not considered earnings. Net Worth: Some IDA programs look at the household assets (such as a car, home, savings, etc.) in addition to household income when determining IDA eligibility. If you own assets valued at more than $5,000, you may not qualify for these IDA programs. Credit History: Debt from credit cards and loans makes it difficult to save. You might not qualify for an IDA if you have a lot of debt or a bad credit history. A program sponsor may ask you to visit a credit-counseling center or pay off your loans before you open an IDA. 3. Make sure you are aware of all requirements before enrolling in an IDA program.  Availability of match funds - Before enrolling in an IDA program, you have the right to know if the promised match funds have already been raised and deposited in the bank. Some IDA sponsors raise only part of the match funds before enrolling participants (expecting to raise additional funds later in the year). Enrolling in an IDA with only partial match funding is allowable, but risky. You should feel that your IDA sponsor is able to raise all of matching funds needed.  Minimum deposit - Some programs require account holders to deposit a minimum amount each month or every few months in order to stay in the IDA program. Before enrolling, make sure that you can save enough to make the minimum deposit.  Limited match - Some programs will only match up to a certain dollar amount (for example, $500) on an annual basis or during the course of the program. In most cases, you can deposit as much as you like in your account, but deposits over a certain dollar amount will not be matched.  Service coordination - Many IDA program sponsors provide a range of services to lowincome families. For example, some organizations may assist families in applying for welfare benefits, obtaining legal aid, preparing income tax returns, or obtaining affordable housing. Be sure to ask each IDA program sponsor about additional services that might be helpful to you.  Other conditions - If the IDA program is hosted by a faith-based organization, will you have to attend religious services or other religious activities? More Info: cfed 777 North Capitol NE Suite 800 Washington, DC 20002 Fax 202/ 408-9793 www.cfed.org The 2001 federal poverty guideline for a family four is $17,650, while the average area median income for a family of four in 2001 is reported as $50, 125. Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 15  Personal Assistant Services (Illinois Medicaid 1915(c) HCBS Waiver Program) Funded through the Illinois Department of Human Services (DHS), Division of Rehabilitation Services (DRS), Home Services Program, the Personal Assistant (PA) program allows qualified persons with severe disabilities to select, employ and manage personal assistants to help with household tasks, personal care and certain health care procedures*. (* requires doctor‟s permission) Forms: Rehabilitation Services Referral, PA Program Application, Customer and Personal Assistant Agreement, Personal Assistance Standards form, Timesheets, W9 (IRS), and Physician Certification Eligibility: To receive PA services, the individual must:        Procedure: Be an Illinois resident with U.S. citizenship or proof of legal entry Be under the age of 60 at the time of application (unless in the AIDS or Brain Injury Medicaid Waiver Program) Have a significant disability that is chronic or has lasted at least 12 months Require services that cost the same as, or less than, nursing home services and be at imminent risk of nursing home placement Have applied for, or is currently receiving, Medicaid Have assets less than: o $10,000 (home and car may excluded) – 18 and older o $30,000 – under 18 Score a minimum of 29 points on the Determination of Need assessment Contact the local DHS Office to be connected with the nearest Home Services Program. Ask to speak with a Home Services Case Manager. More Info:  Illinois Rehabilitation Services: 800/ 843-6154 (Voice) 800/ 447-6404 (TTY) -- Home Services Program www.dhs.state.il.us/ors/hsp/ -- DRS Office locater www2.dhs.state.il.us/geosource/officelocatorsearch.aspx  Illinois Medicaid Wavier: 217/ 557-1868 www.hfs.illinois.gov/hcbswaivers/disabilities.html Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 16  Health Benefits for Workers with Disabilities (Authorized under TWIIA) The Health Benefits for Workers with Disabilities (HBWD) is the Illinois‟ Medicaid Buy-In program which allows people with disabilities to work and receive full Medicaid health care benefits using a medical card. Enrollees must prepay a monthly premium ranging from $0 to $100 based on their income. In addition to monthly premiums, enrollees pay co-pays for medical services. Forms: Health Benefits for Workers with Disabilities Application Eligibility: To be eligible, the individual must:  Not be eligible for the state‟s regular non-spenddown medical card.  Be a citizen of the United States or an immigrant legally admitted for permanent residence and a resident of the state of Illinois.  Be at least 16 years of age and under age 65.  Meet the Social Security Administration definition of disability.  Be employed or self-employed. Provide proof of payment of payroll taxes. Or provide proof that their employment will begin within 60 days.  Provide proof of earned income and allowable deductions.  Provide a Social Security number.  Provide information about other health insurance coverage.  Provide household information.  Have countable assets of $10,000 or less. The value of the participant‟s home and one motor vehicle is exempt.  Have an income equal to or less than: o $ 1702 – Single o $ 2282 – Couple o $ 2862 – Family of 3 o $ 3442 – Family of 4 Procedure: More Info:  Department of Human Services: 800/ 226-0768 (Voice) 866/ 675-8440 (TTY) http://www.hbwdillinois.com/ Complete HBWD application Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 17 Social Security Administration (SSA)  Student Earned Income Exclusion (SEIE) SEIE allows individuals under the age of 22 and regularly attending school (high school or college) to earn up to $1,510/month ($6,100/yr) and continue to receive Supplemental Security Income (SSI) and Medicaid benefits. Forms: None Eligibility: 1. Individuals under the age of 22 2. Proof of regular school enrollment (e.g., ID card, tuition receipt, other) Procedure: 1. SSA verifies student status during the annual SSI re-determination process 2. Generally, SEIE is applied automatically when earnings are reported. It is recommended that SSA be notified in writing of student status. More Info: www.ssa.gov/notices/supplemental-security-income/spotlights/spot-student-earned-income.htm  Plans to Achieve Self–Support (PASS) PASS allows someone with a disability who receives SSI to set aside earned income for a workrelated goal such as purchasing a vehicle, going to school, or starting a business. Money saved under an approved PASS will not count against the SSI resource limits ($2,000/individual, $3,000/couple). Forms: SSA-545-BK (PASS plan) requires  Information about: o Previous employment and PASS plans o Income and expenses (current and anticipated) o Disability o Medical condition o Education/Training o Vocational/Rehabilitation services  Realistic and specific work goals  “Start” and “End” dates  Source and amount of income to be set aside  “What, How and Why” funds will be spent  SSA approval Procedure: 1. Complete, print and sign SSA Form 545 You may complete your own PASS Plan or get assistance from a vocational rehabilitation agency, Ticket to Work agency, SSA office or other organization or individual who can help you gather the required data and complete the form. Print SSA-545 on 8 1/2 x 11 inch paper. Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 18 2. Mail or deliver the completed form to your local SSA Office. Look in your local telephone directory under U.S. Government agencies or call 800/ 772-1213 to identify the SSA office closest to you. More Info: PASS Info PASS application info PASS Form (PDF format) www.socialsecurity.gov/disabilityresearch/wi/pass.htm www.socialsecurity.gov/online/ssa-545.html www.ssa.gov/online/ssa-545.pdf  Impairment-Related Work Expenses Deductions (IRWE) Out-of-pocket expenses related to services, equipment and other items necessary for controlling a disability which enables an individual to work may be deducted from earnings prior to SSA‟s determination of an individual‟s supplemental Security Income (SSI) payment. Familiarity with the IRWE guidelines is essential because some of the allowable expenses seem obvious, while others do not. Allowable costs include certain attendant care services, medical devices and services, medications, equipment, vehicles and transportations services, residential modifications, service animals, and similar items/services. Additionally, the amount deducted may not cost more than the Medicare prevailing charge established for the same item or service in the individual's locale under Part B of title XVIII of the Social Security Act. Due to the complexity of the process it may be prudent to Forms: Procedure: No forms. Contact local SSA Office, report the item you want to deduct. If it is approved, submit a copy of the monthly receipt for that item. More Info: Program: www.socialsecurity.gov/notices/supplemental-security-income/spotlights/ spot-work-expenses.htm www.ssa.gov/OP_Home/rulings/di/03/SSR84-26-di-03.html IRWE Guidelines:  Work and SSDI Benefits Trail Work Period: In 2007, a SSDI beneficiary is allowed nine trial work period months (these do not have to be continuous) over a five year period. A „Trial Work Period Month‟ is any month in which an individual earns $640/mo or more. Extended Period of Eligibility: Once you have completed all nine of your Trial Work Period Months, your case enters a new phase and is governed by a different set of rules. During this period, in 2007, you may earn up to $900/mo for 36 uninterrupted months. As long as you do not exceed $900/mo, you will continue to receive your SSDI check. If, during this new phase, you earn more than $900/month, you will trigger a final phase called the “Grace Period”. Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 19 Grace Period: For the next 3 months, regardless of earnings, you will continue to receive your SSDI check. After the 3 month grace period and within the 36 month extended period of eligibility, you will be eligible to receive your SSDI check for any month your earnings fall below $900 (2007 limit). Expedited Reinstatement: If, within 5 years after your case is closed, you can no longer work due to disability, you may receive your SSDI benefits for 6 months while SSA determines if you are eligible for re-enrollment. If SSA decides in your favor, your benefits pick up where they left off. Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/ Transition to Employment Office: Employment Incentives p. 20 Employment Incentive: RESOURCES  Americans with Disabilities Act (ADA) For ADA information and how it applies to a business, or to obtain copies of ADA regulations, Standards for Accessible Design, or other publications, contact the U.S. Department of Justice at: ADA at DOJ 800-514-0301 (voice) 800-514-0383 (TTY)  Social Security Administration (SSA) For information on employment incentives for persons receiving any form of SSA Disability Insurance, contact the Social Security Administration at: www.socialsecurity.gov 800/ 772–1213 (Voice) 800/ 325–0778 (TTY)  Internal Revenue Service (IRS) For information about tax code provisions that can assist businesses in complying with the ADA and help individuals with disabilities apply for deductions contact the Internal Revenue Service at: IRS Tax code information: 800-829-1040 (voice) 800-829-4059 (TTY) Legal questions about ADA tax incentives: 202-622-3120 (voice) TTY: use relay service  Job Accommodations Network For information on how to accommodate an employee with a disability, contact the Job Accommodation Network at: Job Accommodation Network 800-526-7234 (voice/TTY)  U.S. Access Board For information on ADA Accessibility Guidelines, contact the U.S. Access Board at: United States Access Board 800-526-7234 (voice/TTY)  U. S. Department of Transportation For information on making transportation accessible, contact Project ACTION at: Project ACTION 800-659-6428 (voice) TTY: use relay service  Disability & Business Technical Assistance Centers To obtain ADA compliance assistance in your area, contact the regional Disability and Business Technical Assistance Centers at: ADA Technical Assistance 800-949-4232 (voice and TTY) Disability Support Services, Woody Hall B162 – MC 4705 Southern Illinois University Carbondale, Carbondale, IL 62901 618| 453-5735 (Voice) 618| 453-2293 (TTY) 618| 453-5700 (fax) www.siu.edu/~dss/T2E/