Optometry practices purchasing new equipment often focus on clinical capabilities and efficiency. However, equipment that improves access for patients with disabilities may provide an additional benefit: eligibility for the federal Disabled Access Credit, commonly called the ADA tax credit.
How the Credit Works
The credit generally equals 50% of qualifying accessibility expenditures exceeding $250, with a maximum annual credit of $5,000.
For example, if a practice incurs $10,250 of qualifying expenditures, it may be eligible for the maximum $5,000 credit. The credit may be available each year the practice incurs qualifying expenses.
Could Medical Equipment Qualify?
Qualifying expenditures can include the cost of acquiring or modifying equipment or devices for individuals with disabilities. In an optometry practice, potential examples may include:
- Handheld or headset-based diagnostic equipment that can be used when a patient cannot transfer into a traditional examination chair;
- Portable visual-field or other diagnostic equipment that allows testing while a patient remains in a wheelchair;
- Equipment installed on an adjustable or wheelchair-accessible table; and
- Modifications to existing equipment that make it accessible to patients with physical disabilities.
The key consideration is whether the expenditure was reasonable and necessary to provide access to individuals with disabilities. Equipment does not automatically qualify simply because it is portable, handheld, or mounted on an adjustable table. The practice should be able to demonstrate that the equipment or modification was selected to remove an accessibility barrier or accommodate patients with disabilities.
Depending on the circumstances, the qualifying expenditure could be the entire cost of the equipment, the accessibility-related component of the equipment, or only the cost of modifying an otherwise standard piece of equipment.
Documentation is Important
Practices considering the credit should retain:
- The equipment invoice and proof of payment;
- Product specifications describing the accessibility features;
- Documentation showing how the equipment accommodates patients with disabilities;
- A breakdown of accessibility-related costs, when available; and
- Notes regarding the accessibility limitation the purchase was intended to address.
Before Making a Purchase
Please contact our tax team if you are purchasing equipment designed to improve accessibility. We can help evaluate whether the expenditure may qualify and identify the documentation that should be retained.
A few important considerations include:
- The credit is subject to small-business eligibility requirements;
- Qualification depends on the specific equipment, its intended use, and the applicable accessibility requirements;
- The credit is claimed on Form 8826 and is subject to the general business credit limitations; and
- Claiming the credit may affect the amount that can otherwise be deducted or depreciated.
Improving accessibility can expand the number of patients a practice can serve while making care more comfortable and inclusive. When those improvements qualify for the Disabled Access Credit, the resulting tax savings may also help offset a portion of the investment.
This information is intended for general educational purposes. Please contact our tax team to evaluate how these rules apply to a specific purchase.
Sources: IRS Form 8826 and instructions and IRS guidance on accessibility tax benefits.
A better patient experience could come with a tax benefit, too.
If you’re considering equipment that will make exams or testing more accessible for patients with disabilities, talk with the Williams Group tax team before you buy. We can help you understand whether the purchase may qualify for the Disabled Access Credit and what you should document from the start.
