Law
Internal Revenue Code §44 creates a disabled access credit for an eligible small business that is an amount equal to 50 percent of the "eligible access expenditures" for the taxable year that exceed $250 but not more than $10,250. An "eligible small business" is defined in §44(b) as a person with gross receipts for the preceding tax year that did not exceed $1 million or, if gross receipts were greater, employed not more than 30 full-time employee’s during the preceding tax year; also, such person elects this provision.
Eligible access expenditures under IRC §44(c)(1) means amounts paid or incurred by an eligible small business for the purpose of enabling it to comply with the applicable requirements of the Americans With Disabilities Act of 1990. Eligible expenditures include:
- Removing architectural, communication, physical, or transportation barriers which prevent a business from being accessible to or useable by individuals with disabilities,
- Providing qualified interpreters or other effective methods of making aurally delivered materials available to individuals with hearing impairments,
- Providing qualified readers, taped texts, and other effective methods of making visually delivered materials available to individuals with visual impairments,
- Acquiring or modifying equipment or devices for individuals with disabilities, or
- Providing other similar services, modifications, materials, or equipment.
These expenditures only include reasonable and necessary amounts paid or incurred to comply with the Americans with Disabilities Act. See IRC §44(c)(3). The term eligible access expenditures shall not include amounts paid for the purpose of removing architectural, communication, physical, or transportation barriers in connection with any new building (first placed in service after November 5, 1990).
Under IRC §44(d)(7), if a disabled access credit is claimed, then no other deduction or credit can be taken for the amount of the Disabled Access Credit under any other provision of Chapter 1 of the Internal Revenue Code. In addition, no increase in the adjusted basis of any property shall result from the amount of this credit.
The disabled access credit is computed on Form 8826, "Disabled Access Credit," and is claimed as one of the components of the general business credit. This credit is subject to certain limitations, and carryback and carryforward rules. Any unused credit at the end of the carryforward period is lost - IRC §196(c). No other deduction or credit is permitted for any amount for which a disabled access credit is allowed.
Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.
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