U.S. Small Business Disabled Access Tax Credit Introduction
The disabled access tax credit is a general business tax credit. Businesses must have eligible expenses to receive this tax credit. Expenses incurred to facilitate the work of persons with disabilities are eligible expenses. In addition, the business must also be an eligible small business.
Eligible small businesses generally need to meet the following two requirements:
- In the preceding tax year, the number of full-time employees in the business did not exceed 30 or the total gross receipts did not exceed one million.
- The business chooses to apply for the disabled access tax credit for the tax year.
In addition, the IRS has made certain regulations on full-time employees and the total gross receipts of businesses. Full-time employees: Employees who work at least 30 hours a week and who work at least 20 weeks in the tax year. Both the business’s sales return and sales allowance will reduce the business’s total gross receipts during the tax year.
The IRS stipulates that the expenses incurred in the following four situations are eligible expenses:
- For the disabled to work more conveniently, small businesses have purchased or improved machines and equipment.
- For people with hearing impairments, small businesses provide qualified hearing aids, interpreters, audio materials, etc.
- For people with vision impairments, small businesses allocate qualified vision aids, visual materials, recorded texts, etc.
- Small businesses remove barriers that prevent people with disabilities from entering the business to work.
People who meet any of the following conditions are considered disabled:
- There is a major physical or mental impairment that is severe enough to affect one or more major life activities of a person.
- Or it is considered that there is a major physical or mental impairment.
- Or there may be records showing major physical or mental impairment.
The disabled access tax credit is 50% of eligible expenses. Eligible expenses can be as high as $10,250. But the first $250 is a non-applicable credit. Therefore, the disabled access tax credit can be as high as $5,000. This tax credit is a non-refundable tax credit. If the disabled access tax credit exceeds the tax owed, the small business will not receive any refund after the tax owed is offset.
To obtain the disabled access tax credit, small businesses need to fill out Form8826 "Disabled Access Credit" and attach it to the business tax return. Then, small businesses also need to attach Form3800 "General Business Credit". Certain types of small businesses only need to fill out Form3800 but do not need to fill out Form8826, such as a C - corporation.
Reference:
https://www.irs.gov/pub/irs-pdf/f8826.pdf
https://www.irs.gov/businesses/small-businesses-self-employed/tax-benefits-for-businesses-who-have-employees-with-disabilities
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