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[A511]Americans With Disabilities Act
by Richard Chapo, Ric

Many small businesses complain when confronted with the expense of complying with the Americans with Disabilities Act. Most do not realize that there are a number of tax incentives available to offset the costs. Importantly, one tax incentive comes in the form of a tax credit, which is far more valuable than a tax deduction when it comes to creating tax savings.

Disable Access Tax Credit

If you make your small business accessible to persons with disabilities, you can take an annual tax credit. Your business is eligible if you earned one million or less the previous year or had 30 or fewer employees. If you meet this test, you can claim a tax credit of 50 percent of your expenditures to a maximum of $5,000. Since this is a tax credit, it is deducted from your total tax liability.

To claim this tax credit your expenditures must be paid or incurred to enable your business to comply with the Americans with Disabilities Act. Expenditures might include:

1. Purchase of adaptive equipment or modification of equipment;

2. Production of print materials in alternate formats such as Braille or audio; and

3. Sign language interpreters for employees or customers.

Modifications to buildings or offices also qualify as long as two criteria are met. First, the modifications cannot be construction of something new. Second, the building must have been in service prior to November 5, 1990.

Barrier Removal Tax Deduction

All businesses can take a tax deduction for expenditures incurred to remove physical, structural or transportation barriers for disabled individuals in the work place. This tax deduction carries no restrictions in regard to revenues earned or number of employees. Businesses may claim up to $15,000 a year as a tax deduction. Expenditure amounts exceeding this amount may also be claimed, but are subject to depreciation calculations.

To claim the barrier removal tax deduction, your expenditures must be related to making a facility or vehicle accessible to disabled persons. Examples include:

1. Providing ramps and curb cuts;

2. Making restrooms accessible to persons in wheelchairs; and

3. Expanding the width of sidewalks to at least 48 inches.

Significant Tax Break

Small business owners can double their tax saving pleasure by claiming both of these tax incentives in the same tax year. If a small business spent $20,000 creating wheelchair access to an office, it could take a $5,000 tax credit and a $15,000 tax deduction.

These tax incentives are in place to significantly reduce the burden of complying with the Americans with Disabilities Act. If you failed to claim the credit or deduction during the last three tax filing years, you should file amended tax returns to get a refund.


In 1990, the United States passed into law the Americans with Disabilities Act, which protects individuals with disabilities in the workforce from being discriminated against from things such as hiring, firing, advancement, compensation, job training, etc. This act requires an employer to reasonably accommodate the disabled worker as long as it does not cause undue hardship on the operation of the business. Additionally, an employer is not allowed to ask about the condition, nature, existence or severity of a disability under this act.

To understand several important ADA definitions, including who is protected by the law and what constitutes illegal discrimination, the following are some helpful explanations of key definitions to assist in determining classifications:

* Individual with a Disability - According to the ADA, an disabled individual is one who has mental or physical impairment that will substantially limit one or more abilities in an individual's life. In 1999, the Supreme Court ruled that the determination of whether a person has an ADA "disability" includes consideration of whether the person is substantially limited in performing a major life activity when using a mitigating measure. This means that if a person has little or no difficulty performing any major life activity because they use a mitigating measure, then that person will not meet the ADA's first definition of "disability". Major life activities are activities that an average person can perform with little or no difficulty such as walking, breathing, seeing, hearing, speaking, learning, and working.

Individuals who also suffer from previous substantially limiting impairment are protect by the ADA.

? Qualified Individual with a Disability - A qualified employee or applicant with a disability is someone who satisfies skill, experience, education, and other job-related requirements of the position held or desired, and who, with or without reasonable accommodation, can perform the essential functions of that position.

? Reasonable Accommodation - Reasonable accommodation may include, but is not limited to: making existing facilities used by employees readily accessible to and usable by persons with disabilities; job restructuring; modification of work schedules; providing additional unpaid leave; reorganizing an employee to a vacant job; acquiring or modifying equipment or devices; adjusting or modifying examinations, training materials, or policies; and providing qualified readers or interpreters. Reasonable accommodation may be necessary to apply for a job, to perform job functions, or to enjoy the benefits and privileges of employment that are enjoyed by people without disabilities. An employer is not required to lower production standards to make an accommodation. An employer generally is not obligated to provide personal use items such as eyeglasses or hearing aids.

? Prohibited Inquiries and Examinations - Before making an offer of employment, an employer may not ask job applicants about the existence, nature, or severity of a disability. Disabled applicants may, however, be asked about job function ability performance. A job offer may be contingent on the results of a medical examination, but only if the examination is required for all entering employees in the same job category. Medical examinations of employees must be job-related and consistent with business necessity. ? Undue Hardship - This is defined as an action requiring significant difficulty or expense when considered in light of factors such as an employer's size, financial resources, and the nature and structure of its operation. An employer is not required to lower quality or production standards to make an accommodation.

Under the ADA, performing essential functions are defined as the basic job duties that an employee must be able to perform, with or without reasonable accommodation. An employer needs to examine each job to determine which functions or tasks are essential to performance prior to taking any employment action such as recruiting, advertising, hiring, promoting or firing.

In determining if a function is essential en employer needs to consider whether the reason the position exists is to perform that function, the number of other employees available to perform the function or among whom the performance of the function could be distributed, and the degree of expertise or skill required to perform the function. An employer's determination as to which functions are essential include the actual work, the experience of present or past employees in the job, the time spent performing a function and the consequences of not requiring that an employee perform a function.

A job offer may be conditioned on the results of a medical examination, but only if the examination is required for all entering employees in similar jobs. As long as medical examinations of employees are job related and consistent with an employer's business needs are they necessary.

It is unlawful to retaliate against an individual for opposing employment practices that discriminate based on any disability or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under the ADA.

In 2004, the EEOC received 15,376 charges of disability discrimination. The EEOC resolved 16,949 disability discrimination charges 2004 and recovered $47.7 million in compensation for aggrieved individuals and parties. Of that $47.7 million, approximately 13% was for mental health discrimination cases. This does not include monetary benefits obtained through litigation.
Article Source : Business Tax

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Both Richard Chapo & Alan Haburchak are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Richard Chapo has sinced written about articles on various topics from Finances, Tax Deductions and IRS Tax. . Richard Chapo's top article generates over 74000 views. to your Favourites.

Alan Haburchak has sinced written about articles on various topics from Brain Injury, Business Tax and Brain Injury. Visit for more information on this and other topics ranging from. Alan Haburchak's top article generates over 74000 views. to your Favourites.
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