Question

535 Tax Credits For Barrier Removal
As part of the Omnibus Budget Reconciliation Act of 1990 (OBRA '90),
Congress created a new tax credit to assist certain small businesses in
complying with the Americans with Disabilities Act (ADA). During the debate
over the act, small business groups sought expanded tax credits as a fair
exchange for not being exempted from the public accommodations
provisions.
OBRA '90 gives small business owners an annual tax credit to cover
expenses incurred from making their facilities and programs accessible to
disabled people. Eligible businesses may claim a tax credit equal to 50
percent of the access expenditures between $250 and $10,250 they incur to
comply with the ADA. Only businesses earning less than $1 million during
the taxable year and employing 30 or fewer full-time workers are eligible for
the credit. Specifically, the law allows a business to recover one-half the
costs of:
● Removing architectural, communications, physical, or transportation
barriers that make a business inaccessible;
● Providing qualified interpreters or other effective methods to make
aural materials available to hearing-impaired people;
● Acquiring or modifying equipment and devices for disabled individuals;
and/or
● Providing other similar services, modifications, materials or equipment.
The access credit is limited to the taxable year, and unused portions
from one year cannot be carried over to the next.It does not apply to
costs incurred from new construction.
Existing Tax Deduction Reduced
OBRA '90 reduced from $35,000 to $15,000 an existing tax deduction that
all businesses can take to cover the costs of removing architectural barriers
from their facilities (Internal Revenue Code 190(c)). This includes changes
made to buildings, equipment, walkways, roads and parking lots, and also
applies to businesses that make their public transportation vehicles
accessible to disabled riders. For an expense to be deductible, it must meet
standards established by the Internal Revenue Service. In general, the
expense must be incurred for removing barriers that:
● Pose a substantial barrier to disabled people;
● Affect at least one major class of disabled people (such as blind, deaf
or wheelchair using people); or
● Are removed without creating new barriers.
In addition, for the expense to be deductible, the removal of barriers must
conform to detailed qualification standards to ensure accessibility.
Deductions must be claimed in the year that alterations are made and
cannot be claimed for new construction or complete renovation. For more
detailed information on the existing tax deductions, order Tax Information
for Handicapped and Disabled Individuals, IRS Publication No. 907, from
your local IRS office, o


Read the passage and answer the question.
What is the definition of access credit?
A) money made available through a credit card company
B)
C)
reduced taxes to help cover the cost of making facilities and programs more
accessible
low-interest bank credit to help cover cost of making facilities and programs
more accessible
D) recognition for programs that make facilities accessible to disabled people

Answer 1

C — reduced taxes to help cover the cost of making facilities and programs more accessible. The passage describes an annual tax credit covering 50% of ADA access expenditures.