Title I Technical Assistance Manual

1.Tax Credit for Small Business (Section 44 of the Internal Revenue Code)

In 1990, Congress established a special tax credit to help smaller employers make accommodations required by the ADA. An eligible small business may take a tax credit of up to $5000 per year for accommodations made to comply with the ADA. The credit is available for one-half the cost of "eligible access expenditures" that are more than $250 but less than $10,250.

For example: If an accommodation cost $10,250, an employer could get a tax credit of $5000 ($10,250 minus $250, divided by 2). If the accommodation cost $7000, a tax credit of $3375 would be available.

An eligible small business is one with gross receipts of $1 million or less for the taxable year, or 30 or fewer full time employees.

"Eligible access expenditures" for which the tax credit may be taken include the types of accommodations required under Title I of the ADA as well as accessibility requirements for commercial facilities and places of public accommodation under Title III. "Eligible access expenditures" include:

• removal of architectural, communication, physical, or transportation barriers to make the business accessible to, or usable by, people with disabilities;

• providing qualified interpreters or other methods to make communication accessible to people with hearing disabilities;

• providing qualified readers, taped texts, or other methods to make information accessible to people with visual disabilities; and/or

• acquiring or modifying equipment or devices for people with disabilities.

To be eligible for the tax credit, changes made to remove barriers or to provide services, materials or equipment must meet technical standards of the ADA Accessibility Guidelines, where applicable.