Disabilities Access Tax Credits
Since the Americans with Disabilities Act (ADA) was enacted in 1990, employers have been required to make their workplaces accessible to employees and customers with disabilities. Since the cost of making these accommodations to your business can be costly, the IRS allows you to deduct a portion of the cost of property (called Section 179 property) you buy for this purpose. The deductions in this case are really a tax credit for 50% of the allowable amount for eligible expenditures.
Here are some factors to consider before you run out and buy equipment or building improvements:
- What is covered?
You can receive the tax credit for improvements to your business which remove barriers, like making a rest room door wider, and for new or modified equipment or devices to help disabled individuals. You may also be eligible for credit for interpreters (for a hearing-impaired employee, for example) or means of helping a visually-impaired employee see better.
- How much can I get credit for spending?
You can take a tax credit for 50 percent of eligible expenditures over $250 up to $10,500 a year. So your tax bill can be reduced by up to $5,000.
- Are all small businesses eligible?
The tax credit is available only for businesses with gross receipts of $1 million or less, or fewer than 30 employees.
You must follow IRS guidelines to receive these tax credits; the IRS checks to see that the credit is not abused. Don't buy anything or do anything expecting to get the tax credit without checking first with your CPA or tax advisor.