More than 50 million Americans with disabilities make up a huge, nearly untapped market for businesses of all types and sizes. To help businesses welcome customers with disabilities, the Internal Revenue Service (IRS) offers federal tax incentives to remove access barriers.
Tax Credit
Small businesses with 30 or fewer employees or total revenues of $1 million or less can use the Disabled Access Credit (Internal Revenue Code, Section 44). Eligible small businesses may take a credit of up to $5,000 (half of eligible expenses up to $10,250, with no credit for the first $250) to offset their costs for access, including:
- 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 Deduction
Businesses of all sizes may take advantage of this tax deduction. Under Internal Revenue Code, Section 190, businesses can take a business expense deduction of up to $15,000 per year for costs of removing barriers in facilities or vehicles.
Tax Incentives in Combination
These two incentives can be used together by eligible businesses if the expenditures qualify under both 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.
Tax Incentives Available Every Year
A business that annually incurs eligible expenses to bring itself into compliance with the 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.
Tax Incentives Forms and Publications (November 2005)
For Order Form 8826 (Disabled Access Credit) and Publication 535 “Business Expenses” (Tax Deduction)
800-829-3676 (voice)
800-829-4059 (TTY)
irs.gov
Information on These Tax Incentives and the ADA
Contact the ADA Business Connection
800-514-0301 (voice)
800-514-0383 (TTY)
ada.gov
United States Department of Justice
Civil Rights Division | Disability Rights Section
Note: Business owners should always consult with their CPA, accountant or tax preparer for guidance on how to utilize these tax incentives.
