Copied from the "ADA Tax Incentive Packet for Businesses" www.ada.gov/taxpack.htm

FACT SHEET 4

Tax Incentives for Improving Accessibility

  

The Americans with Disabilities Act Fact Sheet Series

September 4, 1998

 

ADA Materials Logo

Fact Sheets in this series:

Fact Sheet 1. Who Has Obligations Under Title III?

Fact Sheet 2. Providing Effective Communication

Fact Sheet 3. Communicating with People with Disabilities

Fact Sheet 4. Tax Incentives for Improving Accessibility

Fact Sheet 5. Alternatives to Barrier Removal

Fact Sheet 6. Resources for More Information

 

To obtain additional copies of any fact sheet in this series, contact your Disability and Business Technical Assistance Center. To be automatically connected to your regional center, call 1-800-949-4ADA. This fact sheet may be copied as many times as desired by the Disability and Business Technical Assistance Centers for distribution to small businesses but may not be reproduced in whole or in part and sold by any other entity without written permission from the authors.

 

1992 Adaptive Environments Center, Inc.

 

Developed under a grant from the National Institute on Disability and Rehabilitation Research (grant #H133D10122).

 

Adaptive Environments Center, Inc. and Barrier Free Environments, Inc. are authorized by the National Institute on Disability and Rehabilitation Research (NIDRR) to develop information and materials on the Americans with Disabilities Act (ADA). However, you should be aware that NIDRR is not responsible for enforcement of the ADA. The information presented here is intended solely as informal guidance, and is neither a determination of your legal rights or responsibilities under the ADA, nor binding on any agency with enforcement responsibility under the ADA.

 

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Fact Sheet 4

Tax Incentives for Improving Accessibility

 

Two tax incentives are available to businesses 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.

(NOTE: A tax credit is subtracted from your tax liability after you calculate your taxes, while a tax deduction is subtracted from your total income before taxes, to establish your taxable income.)

 

 

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:

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.

Small businesses can use these incentives in combination if the expenditures incurred qualify under both Section 44 and Section 190. For example, a small business that spends $20,000 for access adaptations may take a tax credit of $5000 (based on $10,250 of expenditures), and a deduction of $15,000. The deduction is equal to the difference between the total expenditures and the amount of the credit claimed.

Example: A small business' use of both tax credit and tax deduction

$20,000 cost of access improvements (rest room, ramp, 3 doors widened)

- $5,000 maximum credit

$15,000 remaining for deduction

 

(footer) Produced by Adaptive Environments Center under contract to Barrier Free Environments, NIDRR grant #H133D10122

 

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Fact Sheet 4

Tax Incentives for Improving Accessibility

 

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 TDD

 

IRS Questions

(800) 829-1040 Voice

(800) 829-4059 TDD

 

Legal Questions

Internal Revenue Service

Office of the Chief Counsel

attn: Jolene Shiraishi

CC:PSI: 7

1111 Constitution Avenue, NW, Room 5115

Washington, D.C. 20224

(202) 622-3120 Voice/Relay

http://www.irs.gov

 

(footer) Produced by Adaptive Environments Center under contract to Barrier

Free Environments, NIDRR grant #H133D10122

 

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U.S. Department of Justice
Civil Rights Division
Disability Rights Section
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AMERICANS WITH DISABILITIES ACT
AND TAX INFORMATION SERVICES

For information on the ADA and how it applies to your business or facility, or to obtain copies of ADA regulations, Standards for Accessible Design, the Guide for Small Businesses, or other publications, contact the U.S. Department of Justice

ADA Information Line for publications, questions, and referrals

800-514-0301 (voice)
800-514-0383 (TTY)

Internet address (ADA Home Page)

www.ada.gov

For information on ADA provisions applying to employers and employees, contact the Equal Employment Opportunity Commission

Employment - questions

800-669-4000 (voice)
800-669-6820 (TTY)

Employment - publications

800-669-3362 (voice)
800-800-3302 (TTY)

Internet address

www.eeoc.gov

For information about tax code provisions that can assist businesses in complying with the ADA, contact Internal Revenue Service

Tax code - information

800-829-1040 (voice)
800-829-4059 (TTY)

Legal questions about ADA tax incenties

202-622-3120 (voice)
TTY: use relay service

Internet address

http://www.irs.gov

For information on how to accommodate an employee with a disability, contact the Job Accommodation Network (JAN) funded by the U.S. Department of Labor

Job Accommodation Network

800-526-7234 (voice/TTY)

Internet address

http://www.jan.wvu.edu

For information on the ADA Accessibility Guidelines, contact the U.S. Access Board

ADA Accessibility Guidelines

800-526-7234 (voice and TTY)

Internet address

http://www.access-board.gov/

For information on making transportation accessible, contact Project ACTION funded by the Department of Transportation

Project ACTION

800-659-6428 (voice)
TTY: use relay service

Internet address

http://www.projectaction.org

For information on complying with the ADA and to obtain assistance in your area of the country, contact the regional Disability and Business Technical Assistance Centers funded by the Department of Education

Disability & Business Technical Assistance Centers

800-949-4232 (voice and TTY)

Internet address

http://www.adata.org

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