Federal Tax Incentives for Companies Supporting Employees with Disabilities

​In today’s diverse and inclusive business environment, making accommodations for employees and customers with disabilities is not only a moral and legal obligation but also a smart financial decision. Businesses that implement structural modifications or other accommodations can benefit from various tax incentives designed to offset the costs of these improvements. Below, we will explore the key tax incentives available to employers who make their workplaces more accessible, including the Disabled Access Credit and the Barrier Removal Tax Deduction.

Here are some tax incentives available for employers who make accommodations for individuals with disabilities.

Disabled Access Credit

The Disabled Access Credit is a non-refundable credit available to small businesses that incur expenses to enhance accessibility for individuals with disabilities. An eligible small business is defined as one that generated $1 million or less in revenue or employed no more than thirty full-time employees in the previous taxable year. The business may claim the credit annually as they incur access expenditures. They obtain the credit by filling out Form 8826, Disabled Access Credit, and submitting it with their federal tax return.

Barrier Removal Tax Deduction

The Architectural Barrier Removal tax deduction promotes businesses of all sizes to eliminate architectural and transportation barriers that impede the mobility of individuals with disabilities and the elderly. Businesses may claim a deduction of up to $15,000 annually for qualified expenses on items that typically need to be capitalized. To claim this deduction, businesses must list it as a separate expense on their income tax return.

Additionally, businesses may utilize the Disabled Tax Credit and the architectural/transportation tax deduction concurrently in the same tax year, provided the expenses satisfy the requirements of both categories. To utilize both, the deduction is equivalent to the difference between the total expenses and the amount of the claimed credit. For more information on both these tax incentives visit the IRS Tax Tip page.
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By taking advantage of the Disabled Access Credit and the Barrier Removal Tax Deduction, businesses can significantly reduce the financial burden of making their facilities accessible to individuals with disabilities. These tax incentives not only promote inclusivity and compliance with legal standards but also enhance the overall customer and employee experience. Investing in accessibility is a win-win situation, fostering a more inclusive society while providing tangible financial benefits to businesses. Make sure to consult with a tax professional to maximize these opportunities and ensure all eligibility requirements are met.

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