June 18, 2014

Tax Credits for ADA Remediation Efforts


The cost of ADA remediation efforts for small businesses just went down. The 1991 federal law requiring businesses to provide reasonable accommodations to customers and employees with disabilities and physical limitations put a significant financial burden on many small businesses. Now, however, tax credits for ADA remediation efforts can cover up to one-half of the costs incurred by the small business attempting to comply with the law's requirement.

A fifty percent (50%) tax credit is available each year to eligible small businesses for ADA remediation expenses up to $10,250.00. This means that under certain circumstances the federal government will cover up to one-half of the costs associated with complying with the ADA. Eligible small businesses include any business with gross receipts during the prior year of less than $1 million or any business with no more than thirty employees during the prior year. A business need only satisfy one of these small business standards, not both, in order to be eligible for the tax credit. This broad definition for eligibility allows many more companies to take advantage of the tax credit.

The tax credit is available whether the remediation efforts are designed to make a business more accessible to customers or to assist employees with disabilities. The credit is available each year if a series of remediation projects is undertaken by the business.

The tax credit is also available for a broad range of ADA remediation efforts, not just the ramps and restrooms commonly associated with ADA remediation. As long as the expenses are reasonable in amount and necessary for complying with the ADA, the tax credit is available to remove architectural, communication, physical, or transportation barriers that prevent a business from being accessible to or usable by disabled persons; to provide interpreters or other methods of delivering verbal information and material to hearing impaired persons; providing readers, tapes, or other methods of making visually delivered information and materials available to visually impaired persons; to acquire or modify equipment for disabled persons; or to provide other services, materials, or equipment to disabled persons. In short, almost any expenditure by a business to comply with the ADA is a candidate for the tax credit.

It is important to note, however, that the tax credit does not apply to ADA compliance expenses for new construction. Only remediation expenses are eligible for the tax credit.

It is always advisable to talk with your tax advisor before undertaking any ADA remediation projects to ensure the anticipated costs and expenses are eligible for the tax credit and that the business is an eligible small business. As with all good things in the tax arena, there are restrictions and limitations on the use of the tax credit. Any deduction or other credit that may have been available for the remediation costs are not allowed if the Disabled Access Credit is claimed. Still, it's not often that the federal government offers to pay half of the costs necessary to comply with its laws and regulations.

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