Introduction
Small businesses can face significant barriers when it comes to making their premises accessible to people with disabilities. Many small businesses may not have the financial resources or know-how to make necessary changes, which can ultimately lead to a loss of customers and revenue. However, there are several tax credits available for small businesses that can help them offset the cost of accessibility improvements. In this article, we will explore these tax credits in more detail.
The Basics of Disabled Access Credits
Disabled access credits are tax incentives provided by the federal government to encourage small businesses to make their premises more accessible to individuals with disabilities. These credits can be used by any business that has incurred costs related to accessibility improvements. The amount of credit available depends on a variety of factors, including the size and type of business, as well as the extent of the accessibility improvements made.
There are two main types of disabled access credits available: (1) The Disabled Access Credit (DAC), and (2) The Barrier Removal Tax Deduction (BRTD).
1. The Disabled Access Credit
The DAC is a non-refundable tax credit worth up to $5,000 per year that is available for small businesses with gross receipts less than $1 million or 30 or fewer full-time employees. This credit allows eligible businesses to claim up to 50% of eligible expenses related to improving accessibility for individuals with disabilities.
Eligible expenses include:
– Removing architectural barriers
– Providing communication aids or services
– Purchasing adaptive equipment
– Employing sign language interpreters
– Making modifications such as widening doorways or installing ramps
To qualify for this credit, your business must incur qualifying expenses during the taxable year and submit Form 8826 along with your tax return.
2. The Barrier Removal Tax Deduction
The BRTD provides an incentive for all businesses regardless of size through a deduction from income rather than a non-refundable credit like the DAC. The BRTD allows businesses to deduct up to $15,000 per year for expenses related to removing physical, structural, and transportation barriers that prevent individuals with disabilities from accessing their premises.
Eligible expenses include:
– Removing barriers such as steps or narrow doorways
– Installing ramps or making other structural changes
– Providing accessible parking spaces
– Modifying restrooms or other facilities
To qualify for this deduction, your business must incur qualifying expenses during the taxable year. You should also maintain documentation of these expenses in case of an audit.
How Small Businesses Can Benefit From Disabled Access Credits?
Small businesses can benefit from disabled access credits in several ways:
1. Increased Accessibility
By taking advantage of disabled access credits, small businesses can make their premises more accessible to people with disabilities. This not only helps them comply with disability rights laws but also enables them to serve a wider range of customers and attract new ones who may have been deterred by accessibility issues.
2. Improved Reputation
Making accessibility improvements can enhance a small business’s reputation among consumers who value diversity and inclusivity. By demonstrating a commitment to accessibility, small businesses can build brand loyalty and establish themselves as socially responsible enterprises.
3. Reduced Costs
Disabled access credits can offset the costs associated with making accessibility improvements by providing tax incentives that reduce overall tax liability. This can help small businesses free up resources for other important investments such as hiring additional staff or expanding operations.
Conclusion
In conclusion, disabled access credits are valuable resources that small businesses should consider when looking at ways they can improve accessibility on their premises while reducing costs incurred in doing so. By taking advantage of these incentives provided by the federal government through tax credits and deductions, small business owners could increase foot traffic into their store all while building goodwill amongst potential customers.