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Business Owners: Get a Tax Credit for Making Accessibility Upgrades

by Beth

a woman working on a laptopHey, it’s tax season! If you are a business owner or employer who hasn’t heard about incentives to make accessibility upgrades, check out this helpful reminder from the Mid-Atlantic ADA Center. The site provides quick tips to help you figure out if you qualify. It includes an easy-to-read chart outlining federal tax incentives and shows you how to find out whether your state offers similar incentives. Three examples spell out how it might work for your business:

  • EXAMPLE A, CREDIT: Restaurant ABC employs 25 individuals, and its gross revenue for last year was $3,000,000. It qualifies as a small business with fewer than 30 employees. Last year, ABC provided Braille and large print menus (an auxiliary aid), costing a total of $1,500. ABC removed physical barriers to the restaurant’s entrance and modified its transportation shuttle, totaling $8,000. Each of these expenditures qualifies under the Disabled Access Credit. To calculate ABC’s tax credit, start by adding the total amount spent on accessibility ($8,000 + $1,500 = $9,500) and subtract $250 ($9,500 – $250 = $9,250). Divide this amount by two ($9,250 / 2 = $4,625) to find the amount redeemable as a tax credit. ABC earned a tax credit of $4,625.
  • EXAMPLE B, DEDUCTION: Corporation XYZ removed barriers to its building two years in a row. Although the corporation deducted $4,000 from its taxes last year, XYZ spent money on an additional barrier removal project this year. This is an annual tax incentive, so XYZ is eligible for another tax deduction. XYZ removed all barriers from its bathrooms this year, which cost $8,000. XYZ is able to deduct this amount, $8,000, dollar for dollar, from the amount of money on which it pays taxes.
  • EXAMPLE C, CREDIT & DEDUCTION: Small business QRS spent $20,000 on access improvements by modifying their restrooms and front entrance. These expenditures qualify under both the tax credit and deduction, so QRS can use these incentives in combination. QRS may first take a tax credit of $5,000 (based on $10,250 of expenditures) and then deduct $15,000 (the difference between the total expenditures and the amount of the credit claimed).

Whew! That’s a lot of numbers. If you have questions, never fear – the site offers many other resources, and it encourages you to call the ADA National Network for free technical assistance at (800) 949-4232.


 

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  1. Sue Touhey Says:

    May 5th, 2022 at 6:11 am

    The ADA is EXTREMELY NEEDED IN TODAYS WORLD.

    I thank them for their help.

  2. Sue Touhey Says:

    May 5th, 2022 at 6:08 am

    Thank you for all the good work you do!!!!!!