Disabled Access Credit and Additional Tax Deduction for Barrier Removal Costs for the Disabled or Elderly

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Businesses can take advantage of two Federal tax incentives to deduct the costs of making access improvements to the facility or transportation vehicle for customers with disabilities or the elderly.

 

A business that annually incurs eligible expenses to bring itself into compliance with the American Disabilities Act (ADA) may use these tax incentives every year. The incentives may be applied to a variety of expenditures; however, they may not be applied to the costs of new construction. All barrier removal must comply with applicable Federal accessibility standards.


Disabled Access Credit (Internal Revenue Code (IRC) 44)

Small businesses are eligible if they have:

  • 30 or fewer employees, or
  • total revenues of $1 million or less

Small businesses can take a credit of up to $5,000 (half of eligible expenses up to $10,250, with no credit for the first $250).

Eligible expenses include:

  • barrier removal from their facilities (e.g., widening a doorway, installing a ramp)
  • provision of accessibility services (e.g., sign language interpreters)
  • provision of printed material in alternate formats (e.g., large-print, audio, Braille)
  • provision or modification of equipment

Tax Credit for Barrier Removal Costs (Barrier Removal Costs IRC 190)

Businesses of all sizes may take advantage of this tax deduction to take a business expense deduction of up to $15,000 per year for costs of removing barriers in facilities or vehicles for customers with disabilities or the elderly.


Tax Incentives in Combination

These two incentives can be used together by eligible businesses if the expenditures qualify under both IRC Sections 44 and 190. If a small business’ expenses exceed $10,250 for the maximum $5,000 tax credit, then the deduction equals the difference between the total spent and the amount of the credit claimed.

 




For more information, contact:

Internal Revenue Service (IRS)
Business Questions Hotline
Phone: (800) 829-4933
7 a.m. to 7 p.m. local time

Website: https://www.irs.gov/taxtopics

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