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Cost Issues

ADA compliance costs

You may not charge customers with disabilities extra to recover the costs of complying with the ADA. These costs should be viewed as a business expense, like other expenses that make up your overall cost of doing business. However, there is another way to offset some of these costs.

ADA tax incentives

Congress has made two kinds of tax incentives available to help you offset the costs of complying with the ADA. Your business is allowed to take advantage of these incentives year after year to make your facilities, goods, and services more accessible.

  • The Disabled Access Credit is available to small businesses that have 30 or fewer employees or total revenues of $1,000,000 or less. If yours is a small business, a credit of up to $5000 a year is available to offset costs for removing barriers, hiring interpreters or readers needed for effective communication, producing documents in alternate formats such as large print or audiotape, or taking other steps to improve accessibility for customers or employees with disabilities. This provision is found in section 44 of the IRS tax code.
  • Under section 190 of the IRS tax code, businesses of any size can take a deduction of up to $15,000 each year for the cost of removing barriers in facilities or vehicles.

Both incentives, the credit and the deduction, are available for removing barriers in existing facilities. The credit is also available for providing effective communication or taking other steps to improve accessibility. Neither of the incentives applies to the costs of building a new facility.

Contact your accountant or the IRS for more information about these ADA tax incentives.

Summary

  • You may not charge people with disabilities extra to recover the costs of complying with the ADA. These costs are part of your overall cost of doing business.
  • The costs of complying with the ADA may be offset through special IRS tax credits or deductions.