Small business owners

Why wait another day? Every day your business goes without an accessible entry, remember these three things:
  1. You risk fines of up to $10,000 (for any covered business) should someone decide to file a complaint. A 'covered business' is one that falls under the ADA's 12 categories of public accommodations, which include stores, restaurants, bars, service establishments, theaters, hotels, recreational facilities, private museums and schools, doctors' and dentists' offices, shopping malls, and other businesses.
  2. You lose potential customers and income. Remember that anytime a potential customer can't get in the door, he or she will likely write off that business...and then tell all their friends. But if they can get in the door, you can bet their friends will hear about it, too.
  3. You leave tax benefits on the table. You can take action now to remove barriers to accessibility and recoup much of your investment through a combination of tax deductions and credits.
So, ramping up means: reduced liability, more business, and big tax benefits.

See below for examples of how the tax incentives work. And for businesses who recently removed barriers, ask your tax expert about an amended return.

The following is excerpted from information compiled by the DBTAC: Mid Atlantic ADA CenterThis information is not intended to provide legal tax advice. Be sure to consult the IRS or your tax advisor. See also the FAQ page for small businesses provided by ADA National Network, as well as the Primer for Small Business under the 2010 update to the ADA.


Physical modifications must comply with the applicable accessibility standards (ADA Accessibility Guidelines).

Example A: Credit

Restaurant ABC employs 25 individuals, and its gross revenue for last year was $3,000,000. it qualifies as a small business with fewer than 30 employees last year, ABC provided Braille and large print menus (an auxiliary aid), costing a total of $1,500. ABC removed physical barriers to the restaurant's entrance and modified its transportation shuttle, totaling $8,000. Each of these expenditures qualifies under the Disabled Access Credit. To calculate ABC's tax credit, start by adding the total amount spent on accessibility ($8,000 + $1,500 = $9.500) and subtract $250 ($9,500 -$250 = $9,250). Divide this amount by two ($9,250/2 = $4,625) to find the amount redeemable as a tax credit. ABC earned a tax credit of $4,625.

Example B: Deduction

Corporation XYZ removed barriers to its building two years in a row. Although the corporation deducted $4,000 from its taxes last year, XYZ removed barriers to its building two years in a row. although the corporation deducted $4,000 from its taxes last year, XYZ spent money on an additional barrier removal project this year. this is an annual tax incentive, so XYZ is eligible for another tax deduction. SYZ removed all barriers from its bathrooms this year, which cost $8,000. XYZ is able to deduct this amount, $8,000, dollar for dollar, from the amount of money on which it pays taxes.

Example C: Credit & Deduction

Small business QRS spent $20,000 on access improvements by modifying their restrooms and front entrance. these expenditures qualify under both the ta credit and deduction, so QRS can use these incentives in combination. QRS may first take a tax credit of $5,000 (based on $10,250 of expenditures) and then deduct $15,000 (the difference between the total expenditures and the amount of the credit claimed).

Tax Comparison Chart

Tax Incentives are available to encourage compliance with the Americans with Disabilities Act (ADA). This chart includes the three Federal tax incentives and encourages you to inquire whether your stat offers similar incentives. Unfortunately, many business owners and employers are unaware that these incentives exist. Make sure your business takes advantage of these valuable incentives!


NameCode/FormEligibilityPurpose/ExamplesAmount
Architectural/
Transportation Tax Deduction
Code: Section 190, Barrier Removal Forms:907 & 535All businessesRemoval of physical, structural, and transportation barriers Ex: widening doors, building ramps modifying vehicles.Max=$15,000
Small Business Tax CreditCode: 44,Disabled Access Credit Form: 8826Small businessesMost expenses to comply with the ADA, including barrier removal providing auxiliary aids and services, and accommodating employees. Ex: Providing sign language interpreters, creating Braille documents, building ramps.50% between $250 & $10,250 Max=$5,000
Work Opportunity Tax CreditForm: 5884Small businessesThis credit encourages employment of certain targeted groups, including SSI recipients and vocational rehabilitation referrals.Max=$2,400

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