You're listening to the Disability Law Lowdown, Show Number 12.



Jacquie Brennan: Welcome to the Disability Law Lowdown. I'm your host, Jacquie Brennan. The podcast you're listening to comes to us from Robin Jones, one of our reporters. Robin interviews Peter Berg. Peter is the technical assistance coordinator for the DBTAC Great Lakes ADA Center and he'll be talking about tax incentives that the IRS has for employers and businesses to foster compliance with the ADA. Robin?



Robin Jones: My name is Robin Jones and I’m the director of the Great Lakes DBTAC ADA Center and I am here today with Peter Berg who is a technical assistance coordinator at the DBTAC Great Lakes ADA Center. Peter is going to provide us some information today about tax benefits that are available to employers and businesses that can be used to address needs of their employees with disabilities under reasonable accommodation as well as serving their customers with disabilities.

So, Peter, as we get started here today, it’s my understanding that there are some tax benefits available to employers and businesses to assist them with compliance with the Americans with Disabilities Act. Is this true, and if so, what exactly are they?

Peter Berg: Sure, Robin. There are two tax benefits that are available to businesses and employers under the ADA. The first is the Architectural and Transportation Barrier Removal tax deduction and that is IRS tax code section 190. The second is the Disabled Access credit, also IRS tax code section forty-four.

Robin: Okay, could you just spend a little bit of time here with us reviewing again the names of those tax benefits and briefly describe what they refer to? Let’s start with the deductions.

Peter: The Architectural and Transportation tax deduction for barrier removal applies to the removal of existing architectural and transportation barriers for customers and employees with disabilities. And again that’s IRS tax code section 190.

Robin: Can you discuss a little bit about what exactly that would include or what that would apply to, please?

Peter: For example, for businesses that could include providing accessible parking spaces in their customer parking lots, providing an accessible path of travel from their parking lot to the entrance. It could include the installation of curb ramps or ramps to their entrances. It could include making their front entrances accessible by widening doorways or putting on accessible door hardware or even putting on an automatic or power-assisted door. It also could be used for expenses used to make existing washroom facilities accessible to persons with disabilities.

Robin: Peter, is this something I, as an employer or business owner, could take as part of my planned renovations and building or would there a limit in how I could use this?

Peter: There would be a limit to how it was used. The tax deduction is not available for new construction or requirements to comply as part of an ongoing alteration. It can be used for taking steps to improve access to businesses.

Robin: Is there a maximum amount or any size of my business that I would have to be concerned about in being able to be eligible for this?

Peter: Sure. The good thing about the tax deduction is that it is available to all businesses and it’s an annual tax deduction up to fifteen thousand dollars in applying expenditures.

Robin: Were there any additional examples you were giving? What about inside or how would that apply to an employee?

Peter: For an employee, it could include providing an accessible washroom for an employee with a disability. It could include providing accessible transportation, so installing a lift or ramp on an employer van or other type of vehicle that provided transportation for employees.

Robin: Okay, great. I also understand there’s a tax credit as you mentioned earlier. Could you just briefly discuss the tax credit with our audience?

Peter: Sure. The Disabled Access credit, IRS code section forty-four, is a little bit different than the tax deduction in that there are limitations on who can use the tax credit. The tax credit applies to businesses with thirty or fewer employees or that had less than one million dollars in gross operating revenue the previous year.

Robin: Is there any example you might be able to give us about how a business or employers would be able to use this tax credit?

Peter: Again, this example is for a business. It could be used for making the removal of existing architectural barriers, so again, providing accessible parking, an accessible path to the entrance, making the entrance accessible, making bathrooms accessible.

This can also be used to make communication with customers with disabilities. For instance, a travel agency that has a client coming in that is deaf and needs an interpreter in order to communicate effectively with the travel agency, the expenses associated with providing a qualified interpreter could be used under the tax credit.

For employers, it could include providing assistive technology or adaptive equipment for employees with disabilities. So for instance, purchasing software programs that would allow an employee that is blind or visually impaired to access a computer through screen magnification or a screen-reading program.

Robin: Can you just identify a little bit about how a business would go about using these? I mean, can I use these together? Is it one-time use? How exactly would a business use, or go about, or think about applying either the tax deduction or the tax credit?

Peter: Sure. That’s a great question. The tax credit is a little bit different than the tax deduction. Where the tax deduction is a straight forward annual fifteen thousand dollar deduction, the credit applies to fifty percent of the expenditures over two hundred and fifty dollars up to a maximum amount of ten thousand two hundred and fifty dollars. So it applies to money that a business uses after that two hundred and fifty dollars.

Now, the tax credit and the tax deduction can be used in conjunction with each other. Let’s use the example of a business that is removing existing barriers. Say they’re going to install a couple of ramps, they’re going to widen a door and make a bathroom accessible for customers with disabilities. And let’s say it’s a business that has fewer than thirty employees so they qualify for the tax credit.

Now, if the cost of making those barrier removals is twenty thousand dollars, the first five thousand of that could be used under the disabled access credit. So the first five thousand goes there and the remaining fifteen thousand dollars could be used as a tax deduction under the first tax benefit we talked about.

Robin: So basically an employer could take advantage of both of these tax credits and deductions depending on their particular need at the time and their own structure for their needs for deductions or their ability to use tax credits. Is that correct?

Peter: That is correct. That is correct. They can certainly make use of both of those if they are providing reasonable accommodations to an employee with a disability that fall under an architectural barrier removal.

Robin: I’ve also heard from business as I’ve done my work across our region where they’ve actually been able to use the benefits on the same project over two tax years. Now just let me tell you how they explained it and told me how they were able to do this. If they started a particular project in one tax year but did not finish it until the end of the next tax year they were able to take advantage of the benefit in both tax years because of the costs that were incurred and because they were eligible expenses under both tax years. I thought that was a very clever way for a business to potentially take advantage of that particular situation.

Peter: Sure. That’s an excellent example and it’s going to apply when the businesses actually expend the money for the work that they’re doing.

Robin: Exactly. The other thing I want to reinforce with our listeners is that obviously the issue of cost comes in frequently when we’re dealing with businesses in relationship to the removal of their barriers in their existing facilities as well as when we have employers who are concerned about the cost of reasonable accommodations.

Can you, just for a second here, give us a discussion of how the tax benefit would come into play when we’re looking at the arguments of either undue hardship for a business either from the perspective of a business owner and customers with disabilities or from a reasonable accommodation defense?

Peter: Sure. Absolutely. Let’s take the first example of a business who has an obligation to do what is readily achievable in removing existing architectural and communication barriers for customers with disabilities. Now, a business is not required to take any steps in removing existing barriers that are not readily achievable. “Readily achievable” means what can be easily accomplished with little difficulty or expense.

Now the expense portion of “readily achievable” gets down to what are the resources that are going to be available to that particular business. Your larger businesses oftentimes have greater resources in removing existing barriers than, you know, your mom-and-pop store on the corner.A business must take into consideration, if they’re going to qualify for the tax deduction or if the business qualifies for the tax credit, when they’re looking at whether or not something is readily achievable.

From the perspective of an employer, covered employers have obligations to provide reasonable accommodations to qualified applicants and employees with disabilities. Now there are limitations on the requirement to provide reasonable accommodation and that limitation is what the Equal Opportunity Employment Commission refers to as “undue hardship”. An employer is not required to provide a reasonable accommodation that would impose an undue hardship upon that employer, so something that entailed significant difficulty or expense. A smaller employer may not have, again, the resources to provide a particular accommodation for an employee with a disability.

Let’s say an employer with twenty-five employees wants to hire an applicant who has a visual impairment but is going to require the use of some expensive assistive technology in order to access the companies computer system. Before making the judgment or coming to the conclusion that providing that particular accommodation would pose an undue hardship, the employer should, and must take into consideration the Disabled Access credit may be available to them and how that would impact their ability to provide that accommodation to that employee.

So those are just a couple of examples of how the tax deduction and the tax credit come into play as businesses and employers look at their responsibilities in complying with the ADA.

Robin: That’s a really important point and I know that it’s one that comes up frequently in some of our trainings and our technical assistance calls and such. You know, when you look at this particular issue of applying the concept of undue hardship from a business end and even the use of these tax credits, how would these tax benefits come into play in a business making the argument of undue hardship?

Peter: In terms of an employer, they need to demonstrate that even though they may qualify for the tax credit in the example that I just used or let’s say an employer would qualify for the tax credit and the tax deduction because in order to accommodate an employee or an applicant they would have to make some architectural changes to their facility, they would have to be able to demonstrate that the company lacks sufficient resources, even if they were able to use the tax deduction and the tax credit, that they still lacked the overall resources to provide the particular accommodation, that putting forth the resources to make the physical modifications to the facility would have a negative impact on the employer.

Robin: Thanks. Just to recap and review for the audience the two tax benefits we just talked tot I’m just going to give a brief summary and then, Peter, I’m going to ask you to provide our audience with some information about where they can go to get some additional information about the tax benefits.

So today, in this presentation, we have talked about the IRS code one ninety which is formally referred to as the Tax Deduction to Remove Architectural and Transportation Barriers to People with Disabilities and Elderly Individuals. It is available to any size business and the maximum available tax deduction in any one tax year would be fifteen thousand dollars. That again would be able to be applied to the removal of architectural barriers as well as transportation barriers.

Examples of transportation barriers would be installing a lift in a vehicle that was owned by a company to be used by employees with disabilities or hand controls in a company owned vehicle that was going to be used by an employee with a disability. Also, in the removal of architectural barriers I think some of the examples Peter gave us is it could be used for the re-striping of parking lots to create the correct number of accessible parking spaces, to address the path of travel which might be including installation of curb ramps or a ramp to an entrance or addressing a door hardware, and I think, Peter, you were including the often-cited example, or at least questioned issue which is the installation of automatic doors if that was something that was necessary to increase accessibility for a particular entity. It could also be used internally for the modification of a restroom, widening doorways and things of that nature.

Then there was the IRS code forty-four which is the Disabled Tax Credit which has a little more of a limitation in regards to who is able to use that particular tax credit in that I must have thirty or fewer employees or one million dollars or less gross revenue. That maximum tax credit available on a tax year is five thousand dollars. That works in that the first two hundred and fifty dollars would be spent out of pocket then for every dollar spent thereafter I would be able to take fifty percent of that as a tax credit until my maximum out of pocket expenses was ten thousand two hundred and fifty dollars which would then result in my maximum five thousand dollar tax credit.

That tax credit can be used for a variety of different things. It could be used to offset the purchasing of equipment that might be necessary for an employee with a disability, to pay for services such as a sign language interpreter that might be necessary for an employee or a customer with a disability, It could be used for services that might be necessary for consultations with an employee. For example, if I need to have an ergonomics assessment or something of that nature, the costs could be used to pay for that. It could also be used to pay for the removal of architectural barriers, as well, both for customers with disabilities and employees with disabilities.

So, there are a number of different things, but, Peter, why don’t you give people, because I know this is a section with a lot complexity in it and we start talking about code names and the details of who’s eligible and not and how it applies and such, but I know there’s some information available out there in more detail that people could be referred to. If you could give that information to our listeners, that would be great.

Peter: Sure. A couple of great resources out there. First is the Internal Revenue Service, IRS. Their 800 number is 1-800-829-1040. That’s 1-800-829-1040. Or you can visit their website at www.irs.gov. On the IRS website you can locate the forms that are necessary for filing for the deduction or receiving the tax credit. The tax deduction forms are 324 and 535, that’s 535, and 334. The tax credit form is 8826.

Another great resource out there is, of course, is the national network of ADA Centers which can be contacted by calling 800-949-4232 and you visit their website at www.adata.org.

Robin: Thank you, Peter, for spending your time today to talk about this particular issue for us. It’s a very important law and I think one that we don’t enforce enough with employers and businesses regarding the availability of these tax benefits to assist with their obligations under the Americans with Disabilities Act. Thank you for spending the time and I hope this is useful information to our listeners. Bye now.



Jacquie: Thanks so much to both Robin Jones and Peter Berg for that informative interview. If you have more questions about tax incentives or about anything else to do with the ADA, please contact your ADA Center at 1-800- 949-4232. And don't forget to subscribe to our podcast at disabilitylawlowdown.com or on iTunes so that you never miss an episode. And check out our other Disability Law Lowdown podcasts in Spanish and in American Sign Language. Until next time, this is Jacquie Brennan. Thanks for listening.



The Disability Law Lowdown is brought to you by the Disability Business Technical Assistance Centers, which are a network of ADA Centers that provide training, technical assistance and materials on the ADA and other disability related laws. Funding for the Centers is provided by a grant from NIDRR, the National Institute on disability and Rehabilitation Research. You can subscribe to the Disability Law Lowdown at our website at DisabilityLawLowdown.com or on iTunes.





The Southwest and Rocky Mountain ADA Centers are part of a program of Independent Living Research Utilization at TIRR - Memorial Hermann in Houston, Texas, and is funded by the National Institute on Disability and Rehabilitation Research. If you have questions about disability law or would like to request materials or training, please call 1-800-949-4232. This podcast is protected by the Creative Commons Attribution Non-Commercial No-Derivative-Works 2.5 License. For more information and transcripts, visit www.ada-podcast.com.