Small Businesses: Don’t Overlook the Disabled Access Tax Credit

April 6, 2015

Did you know that you might be eligible to receive a big tax credit for expenditures to make your business ADA-compliant?

The Americans with Disabilities Act of 1990 (ADA) prohibits discrimination against individuals with disabilities in everyday activities. The law requires that businesses offering public goods or services (including doctors’ offices) be accessible to individuals with disabilities.

To comply with ADA and to encourage private business facilities to be more accessible to disabled individuals, a Disabled Access Credit is available to eligible small businesses. For any tax year, the amount of the Disabled Access Credit equals 50% of the amount of the eligible access expenditures for the tax year that exceed $250 but do not exceed $10,250. Thus, the maximum amount of the Disabled Access Credit is $5,000.

For purposes of the Disabled Access Credit, an eligible small business is any business that has gross receipts for the preceding tax year of $1 million or less; or employed 30 or fewer full-time employees during the preceding tax year.

Eligible expenditures include amounts incurred or paid for the following:

  • Removing architectural, communication, physical, or transportation barriers (in connection with any facility first placed in service before November 6, 1990) that prevent a business from being accessible to or usable by disabled individuals;
  • Providing qualified interpreters or other effective methods of making audio materials available to hearing-impaired individuals;
  • Providing qualified readers, taped texts, and other methods of making visual materials available to individuals with visual impairments;
  • Acquiring or modifying equipment or devices for individuals with disabilities; or
  • Providing other similar services, modifications, materials or equipment.

In order to qualify for the Disabled Access Credit, the expenditures must be reasonable and necessary to accomplish the above purposes (e.g., accessible medical equipment used in doctors’ office such as adjustable-height exam tables and chairs, wheelchair-accessible scales, adjustable-height radiologic equipment, portable floor and overhead track lifts, and gurneys and stretchers). However, in another example, X-ray machines purchased by a dentist were not eligible access expenditures and did not qualify for the Disabled Access Credit because the dentist did not purchase the machines to comply with ADA requirement, but rather to provide better dental care for the dentist’s patients.

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