Information for Businesses

• Basic FAQ
  Question and Answers - See Below
• Tax Incentive Information
  Credits and Deductions for Barrier Removal, Hiring, and Accommodations - See Below
• Additional Resources and Publications
  
• Architectural Barriers Quiz
  Test your knowledge of accessibility issues!

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Basic FAQ

Q1.Why should I learn how to comply with the Americans with Disabilities Act (ADA)?

A1. Imagine looking forward to a night out with friends, but being unable to enter any of the restaurants in town. For that matter, imagine being unable to enter the grocery store, the beauty parlor, the bank, the dry cleaners or any of the other small businesses in your community. The ADA recognizes that, for people with disabilities to participate in the everyday activities in their communities, they need to have access to the goods and services provided by your small business.

Q2. Are there any benefits for small businesses to offset the costs associated with ADA compliance?

A2. Americans with disabilities represent a lucrative consumer market more than 49 million strong with $175 billion in discretionary income - twice as much as the teen market. Business owners should remember that good access means good business. The simple measures taken to provide access to people with disabilities also will increase foot traffic by attracting other portions of the population, such as senior citizens, parents with small children in strollers, and people with temporary injuries. According to a recent GAO report, implementing the access provisions of the ADA has increased revenues in the hotel and hospitality industry by 12 percent. People with disabilities gravitate by necessity to business establishments that provide good access and will bring other customers with them to the restaurants, stores and service establishments they patronize.

Q3. Does the government offer tax incentives to help meet the cost of ADA compliance?

A3. Yes. Federal tax incentives are available to help meet the cost of ADA compliance. The Internal Revenue Code allows a deduction of up to $15,000 per year for expenses associated with the removal of qualified architectural and transportation barriers. Eligible small businesses also may receive a tax credit for certain costs of compliance with the ADA. Qualifying businesses may claim a credit of up to 50 percent of eligible access expenditures that exceed $250 but do not exceed $10,250.

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Q4. How much does it cost to comply with the ADA?

A4. Private entities that own, operate, lease, or lease to a business that serves the public you must remove barriers when it is "readily achievable," which means easily accomplishable without much difficulty or expense. The "readily achievable" requirement is based on the size and resources of the business. So larger businesses with more resources are expected to take a more active role in removing barriers than smaller businesses.

Q5. Do I need to make expensive changes even when sales are slow and profits are down?

A5. The ADA recognizes that economic conditions vary. When a business has resources to remove barriers, it is expected to do so; but when profits are down, barrier removal may be reduced or delayed. There are many simple modifications that small businesses can make even when resources are scant.

Q6. What are examples of simple modifications that would be readily achievable in most cases?

A6. Examples include the simple ramping of a few steps, the installation of grab bars where only routine reinforcement of the wall is required, the lowering of telephones, and other modest adjustments. Similarly, restaurants may need to rearrange tables, and stores may need to adjust their layout of racks and shelves in order to facilitate access for wheelchair users.

Q7. What if barrier removal is not readily achievable, what kinds of alternative steps are required by the ADA?

A7. Alternatives may include such measures as in-store assistance for removing articles from inaccessible shelves, home delivery of groceries, or coming to the door to receive or return dry cleaning.

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Q8. Do all businesses have obligations under Title III of the Americans with Disabilities Act (ADA)?

A8. If you own, operate, lease, or lease to a business that serves the public, then you are covered by the ADA and have obligations for removing barriers in existing facilities, ensuring compliance with architectural standards in newly constructed or altered facilities, and communicating effectively with people with sensory disabilities such as blindness and deafness. Places of public accommodation include a wide range of businesses, from hotels, restaurants, and theaters to grocery stores, banks, and art galleries. A wide range of types of private businesses that serve the public are included in the categories, regardless of size.

"Bona fide" private membership clubs are exempt, except to the extent that they make their facilities or services available to non-members. Religious entities are broadly exempt, even if they make their facilities or services available to the general public.

See below for further details:

Type of Establishment Examples

	Place of lodging: Hotel, Inn, Motel (except if less than six rooms for rent and the residence of the owner)
	Establishment serving food or drink: Restaurant, Bar
	Place of exhibition or entertainment: Theater, Cinema, Concert Hall, Stadium
	Place of public gathering: Auditorium, Convention Center, Lecture Hall
	Sales or rental establishment: Bakery, Grocery Store, Clothing Store, Shopping Mall, Video Rental Store
	Service establishment: Bank, Lawyer's Office, Gas Station, Funeral Parlor, Laundromat, Dry Cleaner, Barber Shop, Beauty Shop, Insurance Office, Hospital, Travel Service, Pharmacy, Office of Health Care Provider
	Station used for specified public transportation: Depot, Bus Station, Terminal
	Place for public display or collection: Museum, Library, Gallery
	Place of recreation: Park, Zoo, Amusement Park
	Place of education: Preschool, Nursery, Elementary, Secondary, Undergraduate or Postgraduate Private School
	Social service establishment: Shelter, Hospital, Day Care Center, Independent Living Center, Food Bank, Senior Citizen Center, Adoption Agency
	Place of exercise and recreation: Gymnasium, Health Club, Bowling Alley, Golf Course

Q9. What are some examples of architectural barriers?

A9. Architectural barriers are physical features that limit or prevent people with disabilities from obtaining the goods or services that are offered.

Common examples include:

• Parking spaces that are too narrow and/or lack an adjacent access aisle for people who use wheelchairs and other mobility devices.
• Steps at the entrance of a store or inside the store, where they are necessary to access goods or services.
• Round doorknobs or door hardware that is difficult to grasp.
• Aisles that are too narrow for a person using a wheelchair, electric scooter, or a walker.
• High counters at checkout aisles or where items are available.
• Narrow checkout aisles at cash registers.
• Fixed tables in eating areas that are too low to accommodate a person using a wheelchair or fixed seats in eating areas that prevent a person using a wheelchair from pulling under the table.

Q10. How can I get more information about how to comply with the Americans with Disabilities Act (ADA)?

A10. The DBTAC: Mid-Atlantic ADA Center offers a toll-free telephone information service by calling 1-800-949-4232 (V/TTY). The DBTAC: Mid-Atlantic ADA Center will answer your questions and send you more detailed information.

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Tax Incentive Information

Three Federal tax incentives are available to help businesses comply with the ADA. The incentives support businesses as they remove architectural barriers and accommodate employees and/or customers with disabilities. Many states also offer similar tax incentives. Below you will find information about these incentives, as well as links to specific tax forms and further information.

• Architectural/Transportation Tax Deduction: IR Code Section 190, Barrier Removal
• Disabled Access Credit: IR Code Section 44
• Work Opportunity Tax Credit: (WOTC): IR Code Section 51
• State Tax Incentives

Architectural/Transportation Tax Deduction: IR Code Section 190, Barrier Removal

Key Facts:

• All businesses are eligible for this deduction
• Deduction can be used for removing barriers in existing facilities or transportation vehicles
• Examples of allowable expenditures include widening doors, installing ramps, reshipping parking lots, modifying vehicles, etc.
• Maximum deduction of $15,000 per year
• Barrier removal activities must comply with applicable accessibility standards; for specific standards see the ADA Accessibility Guidelines (ADAAG) for Buildings and Facilities, or the ADA Accessibility Guidelines for Transportation Vehicles
• Small businesses cannot claim a tax credit and deduction for the same dollar spent; however, they can use the incentives in combination, provided that the expenditures incurred qualify under both
• Deduction can be used annually, but expenses may not be carried over from one year to the next
• To claim this deduction, businesses should follow the instructions for Barrier Removal Costs in Chapter 7 of IRS Publication 535.

Disabled Access Credit: IR Code Section 44

Key Facts:

• Small businesses are defined as those that have revenues of $1,000,000 or less OR 30 or fewer full-time employees during the previous year
• Can be used for removing architectural barriers in existing facilities, equipment acquisitions, and auxiliary aids and services
• Examples of eligible expenses: readers for customers or employees with visual disabilities, sign language interpreters for customers or employees who are deaf or hard of hearing, adaptive equipment, production of accessible formats of printed materials (e.g., Braille, large print, audio tape, computer diskette), removal of architectural barriers in facilities or vehicles (must comply with applicable accessibility standards), fees for consulting services (under certain circumstances).
• The amount of tax credit is equal to 50% of the eligible expenditures in a year, over $250 and up to a maximum expenditure of $10,250. (There is no credit for the first $250 of expenditures, therefore, the maximum tax credit is $5,000.)
• New construction expenditures are NOT eligible.
• Can be used annually, but expenses may not be carried over from one year to the next.
• Use IRS form 8826 to claim tax credit. To get form 8826 call 1-800-829-3676 (Voice) 1-800-829-4059 (TTY) or visit the IRS Publications Index

Work Opportunity Tax Credit (WOTC): IR Code Section 51

Key Facts:

• Provides a tax credit for employers who hire certain targeted low-income groups. These groups include certain clients referred from vocational rehabilitation programs, former AFDC recipients, long-term TANF recipients, veterans, ex-felons, food stamp recipients, summer youth employees, and SSI recipients).
• Tax credit of up to 40 percent of the first $6,000, or up to $2,400, in wages paid during the first 12 months for each new hire.
• The WOTC is subject to yearly Congressional renewal. It is currently available to December 31, 2007.
• Eligible employees must work 180 days or 400 hours; summer youth must work 20 days or 120 hours. A partial credit of 25% for certified employees who worked at least 120 hours, but less than 400 hours, may be claimed by the employer.
• Must complete and submit IRS Form 8850, "Pre-Screening Notices and Certification Request for the Work Opportunity and Welfare-to-Work Credits," to your local State Employment Security Agency (SESA). To get IRS form 8850 call 1-800-829-3676 (Voice) 1-800-829-4059 (TTY) or visit the IRS Publications Index
• For more information and details on the WOTC, see the WOTC Fact Sheet

State-Specific Tax Incentives

Maryland: MARYLAND DISABILITY EMPLOYMENT TAX CREDIT

Key Facts:

• The Maryland Disability Employment Tax Credit allows businesses that hire employees with disabilities to take a tax credit for both wages paid to these employees and also for childcare and transportation expenses paid on their behalf.
• The amount of the credit in the first year is 30% of the first $6,000 paid for a maximum allowable credit of $1,800. Childcare / transportation expenses are eligible for a credit up to $600. The amount in the second year is 20% of the first $6,000 paid for a maximum allowable credit of $1,200. Childcare / transportation expenses are eligible for a credit up to $500.
• If the credit is more than the tax liability, the unused credit may be carried forward for the next five tax years.
• A credit will be allowed only for employees hired before July 1, 2006.
• Options are available to encourage even tax exempt organizations.
• Find more information on-line about Maryland's Disability Employment Tax Credit.
• Find Maryland's tax forms on-line as well.

Contact:
Maryland State Department of Education
Division of Rehabilitation Services
2301 Argonne Drive
Baltimore, MD 21218
Phone: 410-554-9401
Toll Free Phone: 1-888-554-0334 ext. 9401
E-mail: dors@msde.state.md.us

Pennsylvania: EMPLOYMENT INCENTIVE PAYMENT TAX CREDIT (EIP)

Key Facts:

• EIP is a Pennsylvania State tax credit in effect through December 31, 2009.
• The EIP encourages employers to hire job seekers who have disabilities and who have completed or are completing rehabilitative services approved through the State Rehabilitation Services program or the U.S. Department of Veterans Affairs.
• An employee must work one year in order to qualify the employer for the maximum first year credit of $2,700. Partial credits may be earned, depending on the accepted reason for employee separation.
• An employer can earn a tax credit of up to 30 percent of the first $9,000 in qualified first year wages; 20 percent for year two; and 10 percent for year three. Also, if the employer provides or pays for child care or transportation services for each new employee, up to $1,800 of addition EIP tax credits are available over the three-year period.
• Find more information on-line about Pennsylvania's Employment Incentive Tax Credit.

Contact:

Pennsylvania Department of Labor and Industry
Tax Credit Unit
1-800-345-2555

Additional Resources and Publications

U.S. Chamber of Commerce:
Making Smart Decisions:
HR Assistance for Hiring Individuals with Disabilities
This site promotes the hiring of workers with disabilities, and includes links to resources for employers and HR professionals.

U.S. Department of Justice:
Tax Incentive Packet on the Americans with Disabilities Act

Rehabilitation Research and Training Center (RRTC):
Fast Facts Sheet on Business
Tax Credits & Deductions for Employment of People with Disabilities

DBTAC: Mid-Atlantic ADA Center:
ADA Quick Tips: Tax Incentives (PDF)
ADA Quick Tips: Tax Incentives (text)

U.S. Department of Justice:
Reaching out to Customers with Disabilities web course
This free, self-paced online course includes ten short modules to address topics such as removing barriers, communicating with customers, policies and procedures, maintaining accessibility, transportation issues, and more.

U.S. Department of Justice:
Expanding your Market: Customers with Disabilities Mean Business (HTML)
Expanding your Market: Customers with Disabilities Mean Business (PDF)

U.S. Department of Justice:
Checklist for Existing Facilities (HTML)
Checklist for Existing Facilities (PDF)

U.S. Department of Justice:
Restriping Parking Lots (HTML)
Restriping Parking Lots (PDF)

U.S. Department of Justice:
Service Animals (HTML)
Service Animals (PDF)

ADA Quick Tips: Sign Language Interpreters (PDF)
ADA Quick Tips: Sign Language Interpreters (text)

Visit our Publications page for a more comprehensive list of business-related publications.

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©2008 DBTAC: Mid-Atlantic ADA Center