Disabled Access Credit for Small Businesses

January 28, 2014

If your business had made an investment to increase accessibility or otherwise enable disabled persons access to your building and services, you may qualify for a tax credit.

The Disabled Access Credit is designed to help businesses comply with the Americans with Disabilities Act (ADA). The ADA credit is available to eligible small businesses with less than $1 million in gross receipts for the preceding taxable year or who employed no more than 30 full-time employees during the preceding year. The tax credit is equal to 50 percent of the “eligible access expenditures” that exceed $250 but do not surpass $10,250 for a taxable year.

Eligible Access Expenditures include expenditures for:

  1. Removing barriers that prevent a business from being accessible to or usable by individuals with disabilities;
  2. Providing qualified interpreters or other effective methods of making audio materials available to individuals with hearing impairments;
  3. Providing qualified readers, taped texts, and other methods of making visual materials available to individuals with visual impairments;
  4. Acquiring or modifying equipment or devices for individuals with disabilities.

All expenditures must be reasonable and necessary and must meet the standards issued by the Secretary of the Treasury in concurrence with the Architectural and Transportation Barriers Compliance Board. Expenses incurred for new construction are not eligible. Eligible expenditures do not include those to remove barriers that prevent a business from being accessible to or usable by individuals with disabilities that are paid or incurred in connection with any facility first placed in service after November 5, 1990. Other terms and conditions may apply.

For the purposes of this tax credit, disability is defined exactly as in the ADA. A full-time employee is defined as one who is employed at least 30 hours per week for 20 or more calendar weeks in the taxable year. In general, all members of a controlled group of corporations are treated as one person for purposes of credit eligibility, and the dollar limitation among the members of any group will be apportioned by regulation. In the case of a partnership, the expenditure limitation requirements will apply to the partnership and to each partner. Similar rules will apply to S corporations (see Internal Revenue Code sections 1361 through 1379, Subchapter S of Chapter 1) and their shareholders.

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