ADA Tax Credit (Information)

     The Americans with Disabilities Act (ADA) was signed into law on July 26th, 1990 by President George H. Bush. President George W. Bush signed the ADA Amendment Act into law on September 25th,  2008. The ADA Amendment Act became effective on January 1, 2009. The objectives of the Act and the Amendment Act are as follows:

1. Improve quality  of care for people with disabilities and activity limitations;
2. Comply with legal obligations under Title II or Title III of the Americans with Disabilities Act;
3. Serve individuals with disabilities and activity limitations who represent a sizable portion of the population;
4. Reducing health care professionals' workplace injuries;
5. Take advantage of the federal incentives to improve accessibility.

     As an aside, it appears that the ADA only provides for injunctive relief and not monetary awards. This means that an entire class of so-called professional plaintiffs will probably not be created by it except in states that do provide for monetary awards. In other words, the intent of the law seems to be to encourage business and practices to comply with the ADA because it is good for their clients, patients and employees and not because they should fear punitive litigation if they should fall short.

     The Federal Government created a tax credit incentive to help enable small business that include podiatry offices to make their facilities and equipment ADA compliant. These tax credit incentives are referred to as "eligible access expenditures" and include podiatry chairs. For a business or practice to be considered eligible, it cannot have grossed more than $1,000,000 in revenue the previous year or have employed 30 or more full-time workers. For an expenditure to be eligible, it must exceed $250 but not be more than $10,250. The amount of the credit is equal to 50% of the "eligible access expenditures" to a maximum of $5000. This definition of eligibility encompasses the vast majority of podiatry practices with only a very few at the top not being eligible.

     An example of how the tax credit is computed is given below for the purchase of a Midmark 417 podiatry chair for $3850.

Midmark 417 cost - $3850. Subtract $250 that is the baseline amount that must be exceeded to qualify for the credit. This leaves a $3600 remainder. 50% of $3600 is $1800. This is the amount that is deductible as a tax credit and not an expense making the true cost of the Midmark 417 chair $2050.

     A tax credit differs from a deduction in that the credit is subtracted from the tax owed whereas a deduction is subtracted from the income amount. The credit cannot be carried over into a subsequent year but having taken it the previous year does not disqualify the doctor from taking it again. Again, the maximal amount that can be credited in a given year is $5000. Click HERE to view IRS Form 8826 that is required to claim the credit.

     The above explanations are for instructional purposes only. Global Intermed is not an accounting firm or a law firm. However, we do often work with accountants to provide them with the information necessary to support deductions and/or credits associated with the purchase of podiatry equipment. Feel free to have your accountant call us if they have any questions.

     Generally and in summary, the ADA tax credit can be applied to providing reasonable accommodations such as sign language, interpreters, readers, materials in an alternative format (such as Braille or large print), the purchase of adaptive equipment, acquiring or  modifying existing equipment or the removal of architectural barriers. Most of the podiatry chairs we sell are already ADA compliant but Global Intermed can modify those chairs that aren't to make them ADA complaint upon request for a small additional charge. Contact us so that we can discuss what will be necessary to make your office ADA complaint and also as to how we can help you save money meeting your podiatry equipment needs. Ask for Mark.

Global Intermed
19876 Henry Rd.
Fairview Park, OH 44126


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