October 23, 2017 | Posted in:

Disabled Access Credit: A Tax Consideration When Upgrading Your Office

Alloy Silverstein’s Tax Tip of the Week

Planning to begin upgrading the offices or workspace of your small business? This may be an opportunity to make improvements to accommodate individuals with disabilities (including your own employees and visitors to the business premises) if you haven’t done so already.

These accommodations are legally required for larger businesses. The improvements may be pricey, but, according to CPAs, there’s a potential tax payoff.

Benefits of the Disabled Access Credit

If your small business qualifies under a special tax law provision, it can claim the Disabled Access Credit for half the cost.

Specifically, the credit is available for making the business premises more accessible to disabled individuals. A “qualified small business” is one that had gross receipts of $1 million or less or didn’t employ more than 30 full-time employees in the preceding tax year. The credit is essentially equal to 50 percent of the first $10,000 of qualified expenses. (Technically, the first $250 of expenses is excluded from the calculation, but then the credit applies to the first $10,250 of expenses.)

That means the maximum credit a qualified small business can claim in a given year is $5,000. Any excess may be carried back for one year and forward for up to 20 years.

The expenses need to be incurred to meet requirements established by the federal law protecting individuals who are disabled. Typically, the credit is claimed for costs related to:

  • Installing ramps
  • Adding guardrails
  • Removing barriers

The credit also applies to material expenses needed for individuals with hearing or visual impairments, and for modifying equipment for their use.

Tax Credit versus Deduction

Finally, the disabled access credit is claimed as part of the general business credit on the tax return of your small business. Remember that a credit is more valuable than a deduction because it reduces tax liability on a dollar-for-dollar basis.

There are so many parts of the tax code that you never know what benefits may be able to come into play for your situation. Tax planning year-round and sharing your business goals and plans with your CPA is essential to have a tax-optimized plan in place.

Contact us for guidance and application to your individual situation
© MC 2017 | “Tax Tips” are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.


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