Up To $15,000/Year Tax Deduction
Businesses may take a tax deduction of up to $15,000 per year through Architectural/Transportation Tax Deduction: IRS Code Section 190, Barrier Removal
What is it and who is eligible?
All businesses are eligible to take an annual deduction for expenses incurred to remove physical, structural, and transportation (i.e. vehicle-related) barriers for persons with disabilities at the workplace.
What is the amount?
Businesses may take a tax deduction of up to $15,000 a year for expenses incurred to remove barriers for persons with disabilities. Amounts in excess of the $15,000 maximum annual deduction may be depreciated.
What expenses are covered?
The deduction is available every year. It can be used for a variety of costs to make a facility or public transportation vehicle, owned or leased for use in the business, more accessible to and usable by persons with disabilities.
What expenses are not covered?
The deduction may not be used for expenses incurred for new construction, or for a complete renovation of a facility or public transportation vehicle, or for the normal replacement of depreciable property.
Example: Chassis: $25,000 – (Depreciation as normal) ADA Modifications: $15,000 – (Tax Deduction can’t be depreciated) If Modification is greater than $15,000, (Depreciate as Chassis)
Are there limits on annual usage?
Although the deduction may be used annually, if a business spends more than may be claimed in one year, it cannot carry over those expenses and claim a tax benefit in the next year.
How can this expenditure be deducted?
The amount spent is subtracted from the total income of a business to establish its taxable income. Businesses should follow the instructions found in IRS Publication 535 entitled: Business Expenses. It is important to note that businesses may not take a deduction and a tax credit on the same expenditure. In order for expenses to be deductible, accessibility standards established under the Section 190 regulations must be met.
**Information collected from Counsel of Pass through & Special Industries. Please consult your accountant when applying the IRS Section 190 Tax Deduction.
The Office of Associate Counsel, IRS, Pass through & Special Industries, 1111 Constitution Avenue, NW, Washington, DC 20224.