Business tax incentives for disability inclusion in California

Making workplaces and storefronts more accessible isn’t just about meeting legal requirements—it’s also smart business. For California companies, accessibility investments can expand customer bases, improve employee retention, and strengthen community reputation. On top of these benefits, the federal tax code offers specific incentives to help offset the costs of improving access for people with disabilities.

This guide explains two of the most valuable incentives available in 2025: the Disabled Access Credit and the Barrier Removal Deduction.

Disabled Access Credit (Form 8826)

The Disabled Access Credit provides a direct way for small businesses to reduce their tax bill when making accessibility improvements.

• Who qualifies: Eligible businesses are those with either $1 million or less in gross receipts for the previous year, or no more than 30 full-time employees.
• What expenses count: Qualified expenditures include items such as installing ramps, adding accessible signage, providing interpreters, upgrading restrooms, or purchasing assistive technology.
• Credit details: The credit is worth 50% of eligible expenditures over $250, up to a maximum of $10,250 in spending. That means businesses can receive a credit of up to $5,000 per year. Claim the credit by filing IRS Form 8826 with your federal tax return.

Barrier Removal Deduction (IRC §190)

In addition to the credit, businesses of all sizes can claim a deduction for certain accessibility improvements.

• Deduction overview: Under Internal Revenue Code §190, businesses can deduct the costs of removing physical, structural, or transportation barriers that limit access for people with disabilities or the elderly.
• Annual limit: The maximum deduction is $15,000 per year, separate from any Disabled Access Credit claimed.
• Examples of qualifying improvements: Constructing accessible restrooms, widening doorways, modifying entrances, or upgrading vehicles to accommodate wheelchairs or other mobility devices.

Together, the credit and deduction provide meaningful financial relief, making accessibility projects more affordable for California businesses of all sizes.

How to Claim These Incentives

To take advantage of these tax benefits, businesses need to file the appropriate IRS forms and maintain accurate records:

• IRS forms needed:
  • Form 8826 to claim the Disabled Access Credit.
  • Form 4562 (Depreciation and Amortization) may be used for the Barrier Removal Deduction, depending on how the expense is reported.
• Documentation and receipts: Keep detailed receipts, contracts, and records describing the nature of the accessibility improvements. If audited, you’ll need to show that the expenditures meet the IRS definitions of qualified access or barrier removal expenses.

Benefits Beyond Taxes

While the tax incentives are important, accessibility investments deliver broader advantages:

• Compliance with ADA: Making improvements helps ensure your business meets the requirements of the Americans with Disabilities Act, reducing the risk of costly lawsuits or penalties.
• Expanded customer base: Accessible facilities welcome more customers, including people with disabilities, older adults, and families with strollers. This can translate into higher sales and stronger community reputation.
• Better employee retention: Accessibility upgrades often benefit employees as well as customers, supporting inclusivity in the workplace and making it easier to retain talented workers with disabilities.

Resources for Employers

Employers don’t have to navigate accessibility improvements alone. Two key resources offer free, expert guidance:

• Job Accommodation Network (JAN): A service of the U.S. Department of Labor, JAN provides one-on-one advice on workplace accommodations and information about tax incentives for businesses.
• Employer Assistance and Resource Network on Disability Inclusion (EARN): EARN offers practical tools, fact sheets, and training for businesses looking to create inclusive workplaces and maximize available incentives.

What to Read Next

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California employers can claim up to $9,600 per eligible hire through the Work Opportunity Tax Credit. This guide explains who qualifies, how to apply with eWOTC, and what forms you’ll need to secure the credit.

California TodayDr. Jennifer Trimpey