The Disabled Access Credit (Section 44 of the Internal Revenue Code) provides a federal tax credit for small businesses that incur expenses to comply with the Americans with Disabilities Act. Texas small businesses making accessibility improvements may claim a tax credit of up to $5,000 annually for ADA compliance costs.
How the Disabled Access Credit Works
Small businesses with gross receipts of $1 million or less, or 30 or fewer full-time employees, may claim a tax credit equal to 50% of eligible access expenditures between $250 and $10,250. This provides a maximum annual credit of $5,000 for expenses related to ADA compliance.
Key Terms
- Maximum credit: $5,000 per year
- Eligible expenses: $250 to $10,250 in access expenditures
- Eligible businesses: Gross receipts of $1 million or less, or 30 or fewer employees
- Recurrence: The credit may be claimed every year that eligible expenses are incurred
What Expenses Qualify
Qualifying expenses include removing physical barriers to access, providing accessible communications (sign language interpreters, Braille materials), acquiring adaptive equipment, and modifying vehicles for accessibility. Both capital improvements and ongoing service costs may qualify.
Barrier Removal Deduction (Section 190)
In addition to the Disabled Access Credit, businesses of any size may deduct up to $15,000 per year for expenses related to removing architectural and transportation barriers. This deduction and the Section 44 credit may be used together for larger accessibility projects.
How Texas Businesses Can Claim the Credit
File IRS Form 8826 (Disabled Access Credit) with your federal tax return. Document all accessibility-related expenditures and maintain records showing the business meets the small business size requirements. Consult with a tax professional to ensure proper claiming.
Find More Programs for Your Business
The ADA Tax Credit for Texas Employers is just one of many programs that Texas businesses may be eligible for. Federal, state, and local governments offer a range of grants, tax credits, loans, and incentives.
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