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Small Business Tax Credit - Americans With Disabilities Act
By: Richard Chapo
Many small businesses complain when confronted with the expense of complying
with the Americans with Disabilities Act. Most do not realize that there are a
number of tax incentives available to offset the costs. Importantly, one tax
incentive comes in the form of a tax credit, which is far more valuable than a
tax deduction when it comes to creating tax savings.
Disable Access Tax Credit
If you make your small business accessible to persons with disabilities, you can
take an annual tax credit. Your business is eligible if you earned one million
or less the previous year or had 30 or fewer employees. If you meet this test,
you can claim a tax credit of 50 percent of your expenditures to a maximum of
$5,000. Since this is a tax credit, it is deducted from your total tax
liability.
To claim this tax credit your expenditures must be paid or incurred to enable
your business to comply with the Americans with Disabilities Act. Expenditures
might include:
1. Purchase of adaptive equipment or modification of equipment;
2. Production of print materials in alternate formats such as Braille or audio;
and
3. Sign language interpreters for employees or customers.
Modifications to buildings or offices also qualify as long as two criteria are
met. First, the modifications cannot be construction of something new. Second,
the building must have been in service prior to November 5, 1990.
Barrier Removal Tax Deduction
All businesses can take a tax deduction for expenditures incurred to remove
physical, structural or transportation barriers for disabled individuals in the
work place. This tax deduction carries no restrictions in regard to revenues
earned or number of employees. Businesses may claim up to $15,000 a year as a
tax deduction. Expenditure amounts exceeding this amount may also be claimed,
but are subject to depreciation calculations.
To claim the barrier removal tax deduction, your expenditures must be related to
making a facility or vehicle accessible to disabled persons. Examples include:
1. Providing ramps and curb cuts;
2. Making restrooms accessible to persons in wheelchairs; and
3. Expanding the width of sidewalks to at least 48 inches.
Significant Tax Break
Small business owners can double their tax saving pleasure by claiming both of
these tax incentives in the same tax year. If a small business spent $20,000
creating wheelchair access to an office, it could take a $5,000 tax credit and a
$15,000 tax deduction.
These tax incentives are in place to significantly reduce the burden of
complying with the Americans with Disabilities Act. If you failed to claim the
credit or deduction during the last three tax filing years, you should file
amended tax returns to get a refund.
About the Author:
Richard Chapo is CEO of
http://www.businesstaxrecovery.com - Obtaining tax
refunds for small businesses by finding overlooked tax deductions and credits
through a free tax return review.
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