IRS Form 8826: Disabled Access Credit Eligibility and Calculation

IRS Form 8826 is the one-page form a qualifying small business uses to claim the Disabled Access Credit, worth up to $5,000 a year for money spent making the business accessible to people with disabilities. The credit equals 50% of eligible spending between $250 and $10,250, and the total flows through Form 3800, the General Business Credit, onto your income tax return. The dollar limits are fixed by statute and have not changed since the credit was enacted in 1990.

Who Can File Form 8826

Your business qualifies as an eligible small business if, in the preceding tax year, it met either one of two size tests:

Gross receipts (reduced for returns and allowances) of $1 million or less, or
No more than 30 full-time employees, meaning employees who worked at least 30 hours per week for 20 or more calendar weeks.

You only need to satisfy one. Being small enough is not enough by itself; you have to elect the credit by actually filing Form 8826 with your return.¹

If your business belongs to a controlled group of corporations or a set of trades or businesses under common control, every entity in that group is treated as a single employer for both tests. The ownership threshold for controlled-group treatment here is more than 50%, lower than the 80% used elsewhere in the tax code.²

Which Expenses Count

Qualifying expenses are amounts paid to help the business comply with the Americans with Disabilities Act. The spending has to be reasonable and necessary, and the work has to meet accessibility standards set by the IRS with the Architectural and Transportation Barriers Compliance Board.³

The statute lists four categories:

Barrier removal, such as installing ramps, widening doorways, or modifying restrooms.
Hearing accessibility, such as sign language interpreters and other ways to make audio content available.
Visual accessibility, such as readers, recorded texts, or Braille materials.
Equipment and devices for use by people with disabilities, such as adaptive computer hardware or assistive technology.

A catch-all covers similar services, modifications, materials, or equipment that don’t fit neatly into those four buckets. Spending that goes beyond what a reasonable business would pay to achieve the same accessibility result can be disallowed.³

The Pre-1990 Building Rule

This is the trap that catches the most filers. Barrier removal expenses qualify only if the facility was first placed in service on or before November 5, 1990, the date Section 44 was enacted. Spending on ramps or doorway modifications in a building constructed or first used after that date does not count under the barrier removal category.⁴

The age restriction is limited to physical barrier removal. Interpreters, readers, adaptive equipment, and other non-structural expenses have no facility-age limit, so a business in a new building can still earn the credit for those.³

How the Credit Is Calculated

Three numbers do the work: a $250 floor, a $10,000 cap on the amount used in the formula, and a 50% credit rate. Form 8826 walks through them line by line:

Add up all eligible access expenditures for the year on Line 1.
Subtract $250.
Cap the result at $10,000.
Multiply by 50%. That is your credit.

Spend $10,250 or more, and you hit the $5,000 ceiling. Spend $5,000, and the credit is $2,375. Spend less than $250, and there is no credit at all.¹

You can claim the credit every year you meet the eligibility rules and incur qualifying expenses, not just once.

Attaching the Form to Your Return

Attach the completed Form 8826 to whichever income tax return your business files: Schedule C with Form 1040 for a sole proprietorship, Form 1120 for a C corporation, or Form 1065 for a partnership. The credit then moves to Form 3800, where it combines with any other business credits and reduces your tax.⁵

Partnerships and S Corporations

A partnership or S corporation computes the credit on Form 8826 and reports it on Schedule K of the entity return. Each partner or shareholder receives a share on their K-1 and claims it on their own Form 3800.¹

If your only Disabled Access Credit comes from a K-1, you do not need to file Form 8826 yourself. Report the credit directly on Form 3800.¹

If the Credit Is Larger Than Your Tax

The Disabled Access Credit is nonrefundable. It can bring your tax to zero but will not generate a refund by itself. Anything left over is not lost: as part of the general business credit, unused amounts can be carried back one year and carried forward for up to 20 years.⁶

To carry the credit back, file an amended return for the prior year: Form 1040-X for individuals or Form 1120-X for corporations. For most small businesses claiming $5,000 or less, the carryforward alone is more than enough time to use the full credit.

Using the Section 190 Deduction in the Same Year

A separate provision, Section 190, lets any business (regardless of size) deduct up to $15,000 a year for architectural and transportation barrier removal, treating the cost as a current expense instead of a capital item.⁷

You can use both benefits in the same year, but not on the same dollars. The denial-of-double-benefit rule in Section 44 blocks any expense from generating both the credit and a deduction or basis increase elsewhere in the code.⁸

The practical order is credit first, deduction second. Spend $20,000 on barrier removal, claim the $5,000 credit on $10,250 of that spending, and the remaining $9,750 can be deducted under Section 190 (up to its $15,000 annual cap) or depreciated normally. The IRS confirms that when both apply, the deduction equals total expenditures minus the credit.⁹

1
Internal Revenue Service. Form 8826 – Disabled Access Credit
2
Office of the Law Revision Counsel. 26 US Code 52 – Special Rules
3
Office of the Law Revision Counsel. 26 USC 44 – Expenditures to Provide Access to Disabled Individuals
4
GovInfo. 26 USC 44 – Expenditures to Provide Access to Disabled Individuals
5
Internal Revenue Service. About Form 8826
6
Office of the Law Revision Counsel. 26 USC 39 – Carryback and Carryforward of Unused Credits
7
Office of the Law Revision Counsel. 26 USC 190 – Expenditures to Remove Architectural and Transportation Barriers to the Handicapped and Elderly
8
Office of the Law Revision Counsel. 26 US Code 44 – Expenditures to Provide Access to Disabled Individuals
9
Internal Revenue Service. Tax Benefits for Businesses Who Have Employees With Disabilities