Title I Technical Assistance Manual

a. Financial Assistance

There are several sources of financial assistance to help employers make accommodations and comply with ADA requirements.

1.Tax Credit for Small Business (Section 44 of the Internal Revenue Code)

In 1990, Congress established a special tax credit to help smaller employers make accommodations required by the ADA. An eligible small business may take a tax credit of up to $5000 per year for accommodations made to comply with the ADA. The credit is available for one-half the cost of "eligible access expenditures" that are more than $250 but less than $10,250.

For example: If an accommodation cost $10,250, an employer could get a tax credit of $5000 ($10,250 minus $250, divided by 2). If the accommodation cost $7000, a tax credit of $3375 would be available.

An eligible small business is one with gross receipts of $1 million or less for the taxable year, or 30 or fewer full time employees.

"Eligible access expenditures" for which the tax credit may be taken include the types of accommodations required under Title I of the ADA as well as accessibility requirements for commercial facilities and places of public accommodation under Title III. "Eligible access expenditures" include:

• removal of architectural, communication, physical, or transportation barriers to make the business accessible to, or usable by, people with disabilities;

• providing qualified interpreters or other methods to make communication accessible to people with hearing disabilities;

• providing qualified readers, taped texts, or other methods to make information accessible to people with visual disabilities; and/or

• acquiring or modifying equipment or devices for people with disabilities.

To be eligible for the tax credit, changes made to remove barriers or to provide services, materials or equipment must meet technical standards of the ADA Accessibility Guidelines, where applicable.

2.Tax Deduction for Architectural and Transportation Barrier Removal (Section 190 of the Internal Revenue Code)

Any business may take a full tax deduction, up to $15,000 per year, for expenses of removing specified architectural or transportation barriers. Expenses covered include costs of removing barriers created by steps, narrow doors, inaccessible parking spaces, toilet facilities, and transportation vehicles. Both the tax credit and the tax deduction are available to eligible small businesses.

For example: If a small business makes a qualified expenditure of $24,000, it may take the $5000 tax credit for the initial $10,250 and, if the remaining $13,750 qualifies under Section 190, may deduct that amount from its taxable income. However, a business may not receive a double benefit for the same expense: for example, it may not take both the tax credit and the tax deduction for $10,000 spent to renovate bathrooms.

Information on the Section 44 tax credit and the Section 190 tax deduction can be obtained from a local IRS office, or by contacting the Office of Chief Counsel, Internal Revenue Service. (See Resource Directory.)

3.Targeted Jobs Tax Credit

Tax credits also are available under the Targeted Jobs Tax Credit Program (TJTCP) for employers who hire individuals with disabilities referred by state or local vocational rehabilitation agencies, State Commissions on the Blind and the U.S. Department of Veterans Affairs and certified by a State Employment Service. This program promotes hiring of several "disadvantaged" groups, including people with disabilities.

Under the TJTCP, a tax credit may be taken for 40% of the first $6000 of an employee's first-year salary. This program must be reauthorized each year by Congress, and currently has been extended through June 30, 1992. Information about this program can be obtained from the State Employment Services or from State Governor's Committees on the Employment of People with Disabilities. (See State listings in Resource Directory.)

4.Other Funding Sources

State or local vocational rehabilitation agencies and State Commissions for the Blind can provide financial assistance for equipment and accommodations for their clients. The U.S. Department of Veterans Affairs also provides financial assistance to disabled veterans for equipment needed to help perform jobs. Some organizations that serve people with particular types of disabilities also provide financial assistance for needed accommodations. Other types of assistance may be available in the community. For example, some Independent Living Centers provide transportation service to the workplace for people with disabilities. For further information, see "Financial Assistance for Accommodations" in Resource Directory Index.