Disabled Access Credit – maybe you qualify

By September 30, 2014Business, IRS, Payroll, Tax Strategy, Taxes

We had a client buy a piece of equipment for his business.  This piece of equipment happens to be handicap accessible.  So we looked into it and there happens to be a tax incentive in doing this.

IRS code sections 44 and 190 explain how a business owner can get a tax credit and/or tax deduction if they improve accessibility to their facility.  So let us give you the general rules so that you know.  Now you won’t lose sleep over this anymore.

Tax Credit –

  • Max credit per year is $5,000.
  • The credit is equal to 50% of the eligible expenses up to $10,250. The first $250 don’t count.
  • Business Revenue needs to be less than $1 million or fewer than 30 full time employees
  • Qualified expenses
  • Provision of readers for customers or employees with visual disabilities
  • Provision of sign language interpreters
  • Purchase of adaptive equipment
    • Ophthalmic wheelchair access slide equipment, and
    • Accessible examination tables.
  • Production of accessible formats of printed materials (braille, large print, audio tape, computer diskette)
  • Removal of architectural barriers in facilities or vehicles (alterations must comply with applicable accessibility standards)
  • Fees for consulting services (under certain circumstances)

The expense needs to fall under one of those categories and it needs to pass another two part test.

  • The expenditure must be for the primary purpose of complying with the ADA requirements; and
  • The expenditure must be reasonably necessary to accomplish that purpose.

This credit is claimed on your business tax return, which for most flows through to your personal tax return.

Tax Deduction-

  • Can deduct up to $15,000 per year.
  • Only eligible on removal of architectural barriers in facilities or vehicles (alterations must comply with applicable federal accessibility standards)
  • Can’t be used on new construction

You can claim a credit and deduction in the same year.
Any amount of the credit that isn’t used that year can carry forward to future tax years.

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