National Disability Awareness Month
For more than 20 years, Congress has designated October as National Disability Awareness Month. The focus on assisting individuals with disabilities under the Americans with Disabilities Act provides the opportune time for businesses to take advantage of federal tax breaks offered for accommodating employees and customers with disabilities.
Even if you haven’t heard of the ADA, the reality is that you have obligations to make your small business accessible for disabled employees and customers. Fortunately, Uncle Sam offers a variety of incentives to help you become ADA compliant – taking a proactive approach, that won’t break the bank.
IRS Incentives
The IRS offers tax credits and tax deductions that can be used every year by qualified businesses to make businesses more handicapped accessible. A tax credit is like a refund you get on taxes you already owe; a deduction means you get to subtract that amount from your revenue when figuring out what is taxable.
Tax Credit for Small Business
The disabled access tax credit for small businesses lets you take a credit for 50 percent of costs for certain ADA compliance over a total $250. This means that for every dollar you spend on ADA compliance over $250 a year, you get 50 cents back. The maximum you can get back per year on this credit is $5,000. Credit could come from installation of wheelchair ramps, accessible entryways or restrooms – as long as the modifications comply with ADA guidelines.
Tax Deduction
The second IRS incentive, the tax deduction, can by used by every business, every tax year. All businesses can get a deduction up to $15,000 spent on removing physical barriers. Physical barriers include both architectural and transportation-related obstacles. Removal might include widening doors, putting wheelchair lifts on delivery vans or putting in handrails. Check with your tax professional if you have questions about precisely which barrier removal falls under the IRS deduction or see Internal Revenue Code Regulation 1.190-2.
Details of both tax breaks can be found through the IRS website.
Other Incentives
Your state may offer additional tax incentives to make your business ADA compliant. In addition, if you want to go the extra mile, there are federal tax credits for hiring disabled individuals of certain targeted groups. For example, hiring individuals who receive SSI or vocational rehabilitation referrals may mean a tax credit up to $2,400 a year. Check with your tax professional for more information.