Since the creation of the Americans with Disabilities Act (ADA), features such as ramps, elevators and automatic doors have become more common in restaurants, offices and other buildings. Accommodating disabled people can be very easy for large corporations. They often have large reserves from which to draw funds for renovating older offices. For small businesses, it may be more difficult to make the changes necessary to give access to those with disabilities.
IRS Form 8826 helps to offset some construction expenditures in the form of tax credits. The changes it covers includes removing barriers that prevent building access to individuals with disabilities. However, there are other categories many people do not think of when it comes to these improvements. Introducing audio materials or qualified interpreters for hearing-impaired people; providing visual materials, taped texts and qualified readers to visually impaired individuals; and modifying equipment or devices for individuals with disabilities can all qualify a business for tax credits.
In order to qualify for this tax credit, a small business cannot have gross receipts exceeding $1 million or greater than 30 full time employees. For the purposes of this form, a full time employee must have worked at least 30 hours a week for 20 or more weeks during the tax year in question. The tax credit is a non-refundable credit which means that it can only reduce the amount of taxes paid by the business. Any credits that would exceed the taxes paid out by the company are not refunded by the IRS. This credit can be taken each and every tax year that a business spends on accessibility changes.
Any expenditure that qualifies for this specific tax credit needs to be necessary and reasonable. Facilities that were constructed after the passing of the Americans with Disabilities Act of 1990 do not qualify for this credit. This means that any new construction begun after the passing of the act must have already had accessibility specifications included in its design and blueprints. The changes must also meet the standards of the Architectural and Transportation Barriers Compliance Board. The credit is for 50% of expenditures over $250 but under $10,000. An experienced tax professional can help small businesses with questions related to IRS Form 8826 and the types of renovations that lead to tax credits. If your business is considering improving its accessibility, now is the time to contact a tax credit expert for answers.