Small Business Tax Credit - Americans with Disabilities Act > NetSparsh

Home
>
Tax
>
Small Business Tax Credit - Americans with Disabilities Act

Small Business Tax Credit - Americans with Disabilities Act

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.

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.

In The News:

Yellen removes obstacle to global corporate-tax deal LivemintU.S. drops key obstacle to global digital tax: Treasury The HinduBiden admin removes stumbling block to global deal on digital tax Business StandardU.S. Drops Digital Tax Demand, Opening Door to Global Deal BloombergView Full coverage on Google News

When It Comes to U.K. Taxes, Sweat the Small Stuff BloombergQuint

Congress demands roll back of ‘Modi tax’ on fuel The Hindu

Biden’s stimulus and the ‘financialization’ of taxes Livemint

Remote Work and Taxes: Start Preparing for Next Year Now BloombergQuint

RBI governor urges Centre, states to cut fuel taxes Times of India

Sunak Plots Tax Raid to Plug U.K. Deficit, Risking Tory Rage Bloomberg

Former Spain king pays 4 million euros in back taxes amid scandals WION

Will home purchase by mother using NRI son's money face tax? BusinessLine

The PF will be taxable at your marginal rate of tax Mint

There are new rules this tax season, courtesy of COVID-19. Here's what you need to know CBC.ca