This article focuses on IRS Form 8826, which helps eligible small businesses claim a federal tax credit for qualifying accessibility improvements and services for people with disabilities. The credit can be as much as $5,000 per year, depending on eligible expenses and the business’s circumstances.

From AIM Financial — Business Tax Preparation in Grand Rapids, Kentwood, Wyoming, and West Michigan

Making a business accessible to customers and employees with disabilities is an important responsibility. Improvements such as installing ramps, widening doorways, modifying equipment, or providing accessible communication services can also involve significant expenses.

Fortunately, eligible small businesses may qualify for a federal tax credit that helps offset some of these costs. IRS Form 8826, Disabled Access Credit, is used to calculate this credit.

For small businesses in Grand Rapids, Kentwood, Wyoming, and throughout West Michigan, understanding Form 8826 may help identify potential tax savings while supporting a more accessible workplace.

What Is IRS Form 8826?

IRS Form 8826 allows eligible small businesses to claim the federal Disabled Access Credit for qualifying expenses incurred to provide access to people with disabilities.

The credit is part of the General Business Credit and is generally reported through IRS Form 3800, subject to the applicable filing rules.

The credit is designed to help qualifying businesses cover certain costs associated with meeting accessibility requirements under the Americans with Disabilities Act (ADA).

Examples of potentially eligible expenditures include:

• Removing architectural barriers that prevent access to a business.
• Making qualifying modifications to facilities or equipment.
• Providing interpreters or other eligible communication services.
• Providing printed materials in accessible formats, such as large print, Braille, or audio.
• Acquiring or modifying qualifying equipment to improve accessibility.

Not every renovation or accessibility-related purchase qualifies. The expense must meet the applicable tax requirements, and documentation should explain how it supports access for people with disabilities.

Official IRS guidance is available at https://www.irs.gov/forms-pubs/about-form-8826. <Cite refs={[“turn135094search1″,”turn135094search2”]}/>

Which Small Businesses May Qualify?

The Disabled Access Credit is available to an eligible small business that meets the gross receipts or employee requirements for the preceding tax year and elects to claim the credit.

Generally, a business may qualify if either:

• Its gross receipts for the preceding tax year were $1 million or less; or
• If it does not meet that gross receipts test, it employed no more than 30 full-time employees during the preceding tax year.

For this purpose, a full-time employee generally means someone employed at least 30 hours per week for 20 or more calendar weeks during the tax year.

For example, a small retail store in Grand Rapids that has qualifying gross receipts and incurs eligible expenses to improve access to its premises may be able to claim the credit.

Likewise, an eligible service business in Kentwood or Wyoming that purchases qualifying accessibility equipment or provides eligible communication services may want to review Form 8826.

Eligibility must be determined using the applicable rules for the business and tax year. <Cite refs={[“turn135094search0″,”turn135094search3”]}/>

How Much Is the Disabled Access Credit Worth?

The credit generally equals 50% of eligible access expenditures that exceed $250, up to a maximum of $10,250 in eligible expenditures.

This calculation produces a maximum credit of $5,000 per year.

Here is a simplified example:

Eligible access expenditures	Approximate credit
$250	$0
$2,000	$875
$5,000	$2,375
$10,250 or more	$5,000 maximum

The credit is calculated by subtracting the first $250 from eligible expenditures, limiting the remaining amount to $10,000, and multiplying that amount by 50%.

For example, if a business has $5,000 in qualifying expenditures, the calculation is:

• Eligible expenditures: $5,000
• Less the first $250: $4,750
• Multiply by 50%: $2,375 potential credit

These figures illustrate the calculation only. The business must meet the eligibility requirements, and the credit is generally nonrefundable, meaning it cannot by itself generate a refund beyond the applicable tax liability. The General Business Credit limitations may also affect how much can be used in the current year. <Cite refs={[“turn135094search0″,”turn135094search1”]}/>

What Is the Difference Between a Tax Credit and a Tax Deduction?

A tax credit and a tax deduction work differently.

A tax credit generally reduces tax liability dollar for dollar, subject to applicable limitations. A deduction generally reduces the amount of income subject to tax.

Businesses of any size may also qualify for a separate federal deduction under Section 190 for certain expenses incurred to remove architectural and transportation barriers for people with disabilities and older adults. The deduction can be up to $15,000 per year for qualifying expenses.

In some circumstances, a business may use both the Disabled Access Credit and the barrier-removal deduction for eligible expenditures. However, the business cannot claim a deduction for the portion of an expenditure covered by the credit. The deductible amount must be adjusted accordingly.

This distinction is important when planning accessibility improvements because the correct treatment may affect the overall tax benefit. <Cite refs={[“turn135094search1″,”turn135094search4”]}/>

How Do You Complete IRS Form 8826?

Completing Form 8826 involves identifying eligible expenses and applying the credit calculation.

Step 1: Confirm small-business eligibility. Review the prior year’s gross receipts and full-time employee records.

Step 2: Identify qualifying expenditures. Separate eligible accessibility expenses from general remodeling, maintenance, and other costs that may not qualify.

Step 3: Gather supporting documentation. Keep invoices, receipts, contractor descriptions, proof of payment, and records explaining the accessibility purpose of the work.

Step 4: Calculate the credit. Apply the $250 minimum expenditure rule, the $10,250 expenditure ceiling, and the 50% credit rate.

Step 5: Account for pass-through credits. If the business receives a credit through a partnership or S corporation, follow the applicable Schedule K-1 and Form 8826 instructions.

Step 6: Report the credit correctly. The credit generally flows into Form 3800, General Business Credit, for eligible taxpayers, subject to special rules for pass-through entities and other filers.

Because filing requirements can differ by business structure, review the instructions for the specific tax year before submitting the return.

What Records Should Your Business Keep?

Good documentation supports both the calculation and the business purpose of the expenditure.

Keep:

• Contractor invoices and itemized receipts.
• Proof of payment.
• Descriptions of the accessibility improvements or services.
• Equipment specifications and purchase records.
• Employee and gross receipts records supporting eligibility.
• Copies of Form 8826 and Form 3800.
• Records supporting any related barrier-removal deduction.

Organizing these documents before filing can make tax preparation more efficient and help answer questions if the IRS requests supporting information.

How AIM Financial Can Help Your Business

Accessibility improvements can benefit customers, employees, and the community. For an eligible small business, the Disabled Access Credit may also help offset some qualifying expenses.

AIM Financial helps businesses in Grand Rapids, Kentwood, Wyoming, and throughout West Michigan with business tax preparation and the proper reporting of applicable tax credits and deductions.

If your business installed a ramp, modified a doorway, purchased qualifying accessibility equipment, or paid for eligible communication services, gather your invoices and expense records before filing.

Contact AIM Financial for business tax preparation assistance to review your records and understand how potentially eligible accessibility expenses should be reported on your federal tax return.

For official details, visit https://www.irs.gov/forms-pubs/about-form-8826.

This article is for general educational purposes only and is not individualized tax or legal advice. Credit eligibility and the treatment of expenses depend on the applicable tax rules and the facts of the business.