What Is the Section 179b Disabled Access Deduction?
Learn the specific IRS rules for the disabled access tax deduction and how small businesses can use Section 179B to help offset accessibility costs.
Internal Revenue Code Section 190 provides a tax deduction for businesses that incur expenses to make their operations more accessible to individuals with disabilities. This provision offers a financial incentive for businesses to comply with the Americans with Disabilities Act (ADA). The deduction allows businesses to recover a portion of these costs by directly lowering their taxable income, making it more affordable to undertake accessibility projects.
Qualifying Access Expenditures
The deduction is available for “eligible access expenditures,” which are reasonable and necessary costs incurred to improve accessibility for individuals with disabilities. These expenditures must be for the purpose of enabling the business to comply with the ADA. A primary category of qualifying costs involves removing architectural, communication, physical, or transportation barriers in existing facilities or vehicles.
Examples of barrier removal include:
- Installing ramps
- Widening doorways
- Modifying restroom facilities for wheelchair access
- Creating accessible parking spaces
The costs must be associated with an existing facility or vehicle; expenses for new construction are not eligible for this deduction.
Another category of qualifying expenditures is the provision of auxiliary aids and services to ensure effective communication. This can include the cost of hiring qualified sign language interpreters to make auditory information available to individuals with hearing impairments. Similarly, expenses for qualified readers, taped texts, or Braille materials to make visual information accessible to individuals with visual impairments are also eligible.
Finally, the acquisition or modification of equipment or devices for individuals with disabilities can qualify. This might involve purchasing adaptive equipment for employees or modifying existing machinery to be usable by a person with a disability.
Calculating and Claiming the Deduction
A business can deduct up to a maximum of $15,000 per year for qualified expenditures. This is a deduction, which reduces taxable income, not a tax credit, which reduces the tax liability itself.
A business cannot claim both this deduction and the Disabled Access Credit under Section 44 for the same expenditure. However, the incentives can be used in combination. If a business has costs that exceed the amount eligible for the credit, it may be able to deduct the excess amount.
When a business claims this deduction, it must reduce the tax basis of the improved property by the amount of the deduction taken. This adjustment prevents the business from also recovering the cost through depreciation. The deduction is claimed on Form 4562, Depreciation and Amortization, where the business must provide a description of the expenditure and its cost. The total amount is then transferred to the business’s main tax return, such as Schedule C for a sole proprietorship, Form 1120 for corporations, or Form 1065 for partnerships.