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Businesses doing alterations to improve accessibility are eligible for two federal tax incentives. The Disabled Access Credit (Internal Revenue Code, Section 44) is available to help small businesses cover ADA-related eligible access expenditures. A small business is one that had either revenues of $1,000,000 or less or 30 or fewer full-time workers in the previous tax year. The credit can be taken to: (1) remove barriers that prevent a business from being accessible to or usable by individuals with disabilities; (2) provide qualified interpreters or other methods of making audio materials available to hearing-impaired individuals; (3) provide qualified readers, taped texts, and other methods of making visual materials available to individuals with visual impairments; and (4) acquire or modify equipment or devices for individuals with disabilities. The credit cannot be taken for the costs of new construction or planned alterations/renovations. 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 is $5,000.
A business of any size can take a tax deduction under Internal Revenue Code - Section 190 for the costs of removing architectural or transportation barriers. Businesses can also take a business expense deduction of up to $15,000 per year for costs of removing barriers in facilities or vehicles. These two incentives can be used together by eligible businesses if the expenditures qualify.
Technical guidance is available through the ADA National Network at 1-800-949-4232.
For additional information, take a look at the following resources:
FAQ: Must alternative steps be taken without regard to costs?
FAQ: What is public accommodation?
Fact Sheet: Effective Communication
