The Disabled Access Credit for Small Businesses
A credit of up to $5,000 a year for making a business accessible to customers and employees with disabilities, who qualifies, what spending counts, and how it coordinates with the barrier-removal deduction.
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
The disabled access credit gives an eligible small business 50 percent of its accessibility spending between $250 and $10,250 a year — up to $5,000 — for removing barriers, interpreters or readers, adaptive equipment, or accessible materials. A business qualifies if, in the prior year, it had gross receipts of $1 million or less or 30 or fewer full-time employees.
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What spending qualifies?
| Expenditure | Qualifies? |
|---|---|
| Removing architectural, communication, physical, or transportation barriers in an existing facility (ramps, widened doorways, accessible restrooms) | Yes |
| Sign language interpreters or other aids for employees or customers with hearing impairments | Yes |
| Readers, taped texts, large print, or Braille materials for people with visual impairments | Yes |
| Acquiring or modifying equipment or devices for individuals with disabilities | Yes |
| Website and software accessibility modifications | Possibly — not specifically addressed by the IRS; may qualify as an effective method of making visual materials available or a similar service, if needed to comply with the Act |
| Barrier removal in a facility first placed in service after November 5, 1990, including new construction | No |
| Expenses not required to comply with the Americans with Disabilities Act | No |
The expenditures must be reasonable and necessary to comply with the Act's requirements.
How is the credit calculated?
Take eligible expenditures for the year, subtract $250, and multiply by 50 percent; the result cannot exceed $5,000. Spending of $10,250 or more yields the full $5,000. The credit is claimed on Form 8826 and is part of the general business credit, with a one-year carryback and 20-year carryforward.
How does it work with the barrier-removal deduction?
Section 190 lets any business deduct up to $15,000 a year of costs to remove architectural and transportation barriers, instead of capitalizing them. An eligible small business can use both in the same year, but the credit amount itself cannot also be deducted or added to basis: the deduction equals total qualifying spending minus the credit. A business spending $20,000 on a ramp and restroom renovation could claim the $5,000 credit and deduct the other $15,000 under Section 190 — exactly its annual limit; any spending above that would be capitalized and depreciated.
Who uses it?
Medical and dental offices, restaurants and retail with older premises, professional offices hiring an employee who needs equipment or interpretation, and possibly a small business updating its website for screen readers.
Frequently asked questions
Can the credit be claimed every year?
Yes, for eligible expenditures in each year, as long as the business meets the size test (measured on the prior year) and elects the credit by filing Form 8826.
Does leasing the premises matter?
No. A tenant that pays for the modifications can claim the credit, though barrier-removal costs qualify only in a facility first placed in service on or before November 5, 1990.
Can an S corporation or partnership claim it?
The credit passes through to the owners and is claimed on their returns; the $5,000 limit applies both to the entity and to each owner.
Do I need an ADA compliance determination?
No formal determination is required, but you must be able to show the work meets the federal accessibility standards in the regulations; keep invoices and a description of the purpose.
Official sources
The IRS explains: “Eligible small businesses use Form 8826 to claim the disabled access credit. This credit is part of the general business credit.” — Internal Revenue Service, About Form 8826, Disabled Access Credit, https://www.irs.gov/forms-pubs/about-form-8826
The Internal Revenue Code provides: “For purposes of section 38, in the case of an eligible small business, the amount of the disabled access credit determined under this section for any taxable year shall be an amount equal to 50 percent of so much of the eligible access expenditures for the taxable year as exceed $250 but do not exceed $10,250.” — Legal Information Institute, Cornell Law School, 26 U.S. Code § 44 - Expenditures to provide access to disabled individuals, https://www.law.cornell.edu/uscode/text/26/44
Next step
Fairlight Accounting handles U.S. domestic, cross-border (U.S.–Canada), and international tax returns, plus bookkeeping, payroll, and CFO advisory. Our U.S. Tax Desk separates accessibility spending in the books so the credit and the deduction are both captured. See pricing or book a free fit call.
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