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Tax Credits Available for Accessibility
Improvements
Two tax incentives are available to business
to help cover the cost of making access improvements.
- The first is a tax credit that can be used for architectural
adaptations, equipment acquisitions and services, such as sign
language interpreters.
- The second is a tax deduction that can be used for architectural
or transportation adaptations.
Tax Credit
The tax credit, established under Section 44 of the
Internal Revenue Code, was created in 1990 specifically to 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:
- Providing readers for customers or employees with visual disabilities.
- Providing sign language interpreters.
- Purchase of adaptive equipment.
- Production of accessible formats of printed materials (i.e. Braille,
large print, audio tape, computer diskette).
- Removal of architectural barriers in facilities or vehicles (alterations
must comply with applicable accessibility standards).
- Fees for consulting services, under certain circumstances
Note that the credit cannot be used for the costs of new construction. 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.
Tax Deduction
The tax deduction, established under Section 190 of the Internal
Revenue Code, is now a maximum of $15,000 per year a reduction from
the $35,000 that was available through December 31, 1990. A business
(including active ownership of an apartment building) of any size
may use this deduction for the removal of architectural or transportation
barriers. The renovations under Section 190 must comply with applicable
accessibility standards. Annual Incentives
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.
For further details and information, review these incentives with an accountant
or contact your local IRS office or the national address below.
For More Information…
Request IRS Publications 535 and 334 for further information on
tax incentives, or Form 8826 to claim your tax credit.
IRS Publications and Forms
800-829-3676 Voice
800-829-4059 TTY
IRS Questions
800-829-1040 Voice
800-829-4059 TTY
Legal Questions
Internal Revenue Service
Office of the Chief Counsel
1111 Constitution Avenue Northwest
Room 5112
Washington, DC 20224
202-622-3110 Voice/Relay |
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