Disabled Access Credit Modernization Act
- Sponsor
- Rep. McBride, Sarah [D-DE-At Large]
- Committees
- Ways and Means Committee (primary)
- Last action
- Jul 21, 2026
Bottom line
The bill broadens the scope of the disabled access tax credit, encouraging small businesses to make more extensive accessibility improvements beyond minimum ADA compliance.
What it actually does
This bill, the 'Disabled Access Credit Modernization Act,' amends the Internal Revenue Code of 1986 to expand the types of expenditures eligible for the disabled access credit for small businesses. It clarifies that costs exceeding or not subject to Americans with Disabilities Act (ADA) requirements can still qualify, and it adds 'reasonable accommodation' to the terms defined by reference to the ADA. The bill also mandates regulatory guidance and public outreach programs to inform businesses about the modernized credit.
Proponents argue
Proponents argue that this bill will incentivize small businesses to go beyond the minimum requirements of the ADA, fostering a more inclusive environment for individuals with disabilities. They contend that expanding eligible expenditures and clarifying the credit's applicability will remove financial barriers that currently deter businesses from making comprehensive accessibility upgrades, ultimately benefiting both businesses and the disability community.
Opponents contend
Opponents might express concerns about the potential revenue loss associated with expanding a tax credit, particularly without a clear cap or detailed cost analysis. Some may argue that the existing ADA framework is sufficient and that further federal incentives could lead to inefficient spending or create an uneven playing field if not all businesses can equally leverage the credit.
The bill text is short and clear, allowing for a quick and thorough understanding of its provisions.
Section 2(a)(1)
Expansion of Eligible Disabled Access Expenditures
This provision amends Section 44(c)(1) of the Internal Revenue Code to broaden the categories of expenses that an eligible small business can claim for the disabled access credit. It explicitly includes costs for removing architectural, communication, physical, or transportation barriers, providing qualified interpreters or readers, acquiring or modifying equipment, and offering 'other similar services, modifications, materials, equipment, or reasonable accommodations.' This expands the credit's applicability beyond previous interpretations.
Supporters argue
Supporters argue that this expansion is crucial for encouraging businesses to create truly accessible environments, moving beyond a narrow interpretation of compliance. They believe it will empower small businesses to invest in a wider array of solutions tailored to diverse disability needs, fostering greater inclusivity.
Critics contend
No specific opposition is typically raised against the expansion of eligible expenditures for accessibility, as the underlying goal of promoting access is widely supported. However, some might raise general concerns about the fiscal impact of expanding tax credits without corresponding revenue offsets.
Tradeoffs
The tradeoff involves the federal government foregoing tax revenue to incentivize private sector investment in accessibility. The tension lies in balancing the desire for broad accessibility with the fiscal responsibility of managing tax expenditures.
Section 2(a)(2)
Clarification on ADA Compliance and Credit Eligibility
This section clarifies that expenditures for accessibility purposes will not be deemed unreasonable or unnecessary for the tax credit simply because they exceed the requirements of the Americans with Disabilities Act of 1990 (ADA) or because the taxpayer is not legally subject to ADA requirements. This means businesses can claim the credit for going above and beyond minimum legal standards or for making improvements even if the ADA doesn't strictly apply to them.
Section 2(d) and 2(e)
Regulatory Authority and Public Outreach
This bill mandates that the Secretary of the Treasury, in consultation with the Equal Employment Opportunity Commission (EEOC), prescribe necessary regulations or guidance within 12 months of enactment. Additionally, the Secretary, in consultation with the Small Business Administration (SBA) and the National Council on Disability, must carry out public outreach programs within 12 months to inform eligible small businesses and the Americans with Disabilities Act National Network about the modernized credit. A report on the effectiveness of these outreach programs is due to Congress within 24 months.
This section amends Section 44(d)(1) of the Internal Revenue Code to state that the terms 'disability' and 'reasonable accommodation' both have the same meanings as 'disability' under the Americans with Disabilities Act of 1990. This is an unusual definitional approach for 'reasonable accommodation.'
Section 2(a)(3)
Why it matters:This is likely standard legislative practice for technical amendments, but the specific wording chosen for 'reasonable accommodation' might be an oversight or intended to simplify by referencing an existing definition, even if it's a bit circular.
Case for: Supporters might argue that referencing the ADA's definition of 'disability' for both terms simplifies the Internal Revenue Code by avoiding the need for a separate, potentially conflicting, definition of 'reasonable accommodation,' ensuring consistency with established civil rights law.
Case against: Critics could contend that defining 'reasonable accommodation' as having the same meaning as 'disability' is imprecise and potentially confusing, as the ADA defines these terms distinctly. This could lead to ambiguity in how 'reasonable accommodation' expenditures are interpreted for the tax credit, potentially creating uncertainty for businesses and the IRS.
Estimated impact: The impact is primarily on legal interpretation and clarity for businesses seeking the credit. It could lead to either streamlined application if broadly accepted or confusion if the IRS or courts interpret the definition strictly.