Laws and Tax Incentives

LAWS & TAX INCENTIVES

This blog provides a historical overview of the Acts and Codes created to protect the rights of Deaf and hard of hearing individuals, as well as information on tax incentives, to provide an understanding of accessibility, and the role individuals and businesses play in providing equal access in our communities.

In 1973, modeled after the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act was signed into law. This prohibits discrimination against individuals with disabilities by entities which receive federal funding. Section 504 protects people with disabilities and ensures that children with disabilities have equal access to an education. However, this section did not require public schools to provide an individualized educational program (IEP). In 1975, a Federal Law was passed called Education of Handicapped Children Act. In 1990, amendments were made to the law changing the name to Individuals with Disabilities Education Act (IDEA). The IDEA requires that public schools create an Individualized Education Program (IEP) for each student who is found to be eligible under both the federal and state eligibility/disability standards.

On July 26, 1990, The American Disabilities Act (ADA) was signed into law by President George H.W. Bush. This act guarantees that people with disabilities will have the same opportunities to participate and understand as nondisabled individuals. The ADA law applies to employers, state and local governments and public accommodations including but not limited to doctor’s offices, hospitals, lawyer’s offices and private schools, among a whole list of other entities, regardless of whether or not such entity receives federal funding.

The Department of Justice regulations listed below, highlights our society’s responsibility to provide sign language interpreting services to the deaf specifically by public accommodations. The Department emphasizes that public accommodations must take steps necessary to ensure that an individual with a disability will not be excluded, denied services, segregated or otherwise treated differently from other individuals because of the use of inappropriate or ineffective auxiliary aids. All public accommodations must ensure effective communication with individuals with disabilities. In situations requiring an interpreter, the public accommodation must secure the services of a qualified interpreter, unless an undue burden or fundamental alteration of the nature of the goods, services, facilities, privileges, or accommodations being offered, would result.

28 C.F.R. 36.303 (b)(1) - Auxiliary aids and services expressly include qualified interpreters, transcription services, and written materials, as well as the provision of video phones, telephone handset amplifiers, television decoders and telephones compatible with hearing aids.

28 C.F.R. 36.301(c) – The Justice Department regulation defines a “qualified interpreter” as follows: Qualified interpreter means an interpreter who is able to interpret effectively, accurately and impartially both receptively and expressively, using any necessary specialized vocabulary.

28 C.F.R. 36.104 – The Justice Department warns that family members and friends may not be able to provide impartial or confidential interpreting, even if they are skilled sign language users. In certain circumstances, notwithstanding that the family member or friend is able to interpret or is a certified interpreter, the family member or friend may not be qualified to render the necessary interpretation because of factors such as emotional or personal involvement or consideration of confidentiality that may adversely affect the ability to interpret effectively, accurately and impartially. There is a clear prohibition against the use of family members or any accompanying adult as an interpreter with very rare exceptions. 28 C.F.R. 36.303

For more information about The American Disabilities Act, go to the United States Department of Justice Civil Rights Division webpage at:
www.ADA.gov, or Call: 800-514-0301 (Voice) or 800-514-0383 (TTY).

TAX CREDITS & DEDUCTIONS:

Tax incentives are available for businesses accommodating people with disabilities. The tax incentives that are available for businesses are tax credits and tax deductions.

The Disabled Access Credit (the tax credit) established under Section 44 of the Internal Revenue Code (IRC) was created in 1990. It was designed specifically to help small businesses cover ADA expenditures.

The tax credit is available to businesses that have total revenues of $1,000,000 or less in the previous tax year or 30 or fewer full-time employees during the preceding tax year as defined in Section 44. The tax credit is equal to 50% of the eligible access expenditures in a year, up to $10,250. There is no credit for the first $250 of expenditures. The maximum tax credit is $5,000.

Eligible access expenditures for this tax credit include expenditures to comply with the ADA. Such expenditures may include, but are not limited to, the cost of providing sign language interpreting services to Deaf and hard of hearing people; providing provisions for individuals with visual disabilities such as braille, large print and audio tape; and for acquiring or modifying adaptive equipment and devices for customers and employees with disabilities.

If the tax credit is claimed, the eligible access expenditures claimed as a deduction or capitalized must be reduced by the amount of the credit. The Architectural Barrier Removal Tax Deduction (the tax deduction) was established under Section 190, of the IRC. It predates Section 44, is not connected to ADA compliance, and is available to any business taxpayer.

Businesses may elect to claim a tax deduction up to $15,000 per year for qualified expenditures that normally must be capitalized. Qualified expenditures for this tax deduction include costs incurred to make a facility or public transportation vehicle more accessible to and usable by individuals who are disabled or elderly. Regulations issued under Section 190 describe types of barrier removals that would generate qualified expenditures.

The difference between a tax credit and a tax deduction is that a tax credit is subtracted from your tax liability after you calculate your taxes, while a tax deduction is subtracted from your income before establishing your taxable income.

The tax credit and deduction can be used annually. However, you may not carry over expenses from one year to the next and claim a credit or deduction for the portion that exceeded the expenditure limit the previous year. If the amount of credit you are entitled to exceeds the amount of taxes you owe, you may carry forward the unused portion of the credit to the following year.

Both incentives can be used together in the same year by an eligible small business if the expenditures qualify under both Sections 44 & 190.

For more information, please reference the Internal Revenue Service Publications and Forms listed below located at www.IRS.gov.

Form 8826 ~ Disabled Access Credit
Publication 535 ~ Business Expenses
Publication 334 ~ Tax Guide for Small Business

This blog has been prepared for general informational purposes only. It is not intended to provide and should not be relied on for legal or tax advice. Please consult your tax or legal advisor regarding your specific situation.

References: www.ADA.gov; www.IRS.gov.