Paying for ADA Upgrades: Section 44 Credit & 190 Deduction

The Cost Has Help Most Owners Miss

When a business faces ADA parking upgrades, the conversation is almost always about cost. What gets left out of that conversation is that the federal tax code provides two specific incentives designed to help businesses pay for accessibility improvements. Used together, the Section 44 Disabled Access Credit and the Section 190 deduction can meaningfully offset the cost of bringing a parking lot into compliance, and a surprising number of owners never claim them.

This page explains both incentives and how they work together for ADA parking upgrades. The actual cost of those upgrades is covered in our what ADA parking compliance costs page. This is general information, not tax advice; consult a tax professional about your specific situation.

Section 44: The Disabled Access Credit

Internal Revenue Code Section 44 provides the Disabled Access Credit, a tax credit aimed specifically at small businesses that incur expenses to comply with the ADA.

The general framework:

• Who qualifies. The credit is for "eligible small businesses," generally those that meet a gross-receipts test or an employee-count test for the year. It is designed for smaller operations, not large corporations.
• What it covers. Eligible access expenditures incurred to comply with the ADA, which can include removing barriers and providing access, the category accessible-parking work falls into.
• How much. The credit covers a percentage of eligible expenditures above a small floor, up to an annual maximum. Because it is a credit, it reduces tax owed dollar-for-dollar within those limits, which is more valuable than a deduction of the same size.

For an eligible small business doing accessible-parking work, restriping, signage, and related barrier removal, the expenditures can fall within the credit's scope, offsetting a chunk of the cost.

Section 190: The Barrier-Removal Deduction

Internal Revenue Code Section 190 provides a deduction for the costs of removing architectural and transportation barriers to people with disabilities and the elderly.

The general framework:

• Who qualifies. Section 190 is broader than Section 44 and is not limited to small businesses, so larger businesses that do not qualify for the credit may still use the deduction.
• What it covers. Qualified barrier-removal expenses, which can include parking-lot accessibility work, up to an annual deduction limit.
• How it works. As a deduction, it reduces taxable income rather than tax owed directly, so its value depends on the business's tax rate.

Section 190 is the more general tool, available to a wider range of businesses, while Section 44 is the targeted small-business credit.

Using Both Together

The two incentives are designed to be complementary, and an eligible small business can often use them in combination on the same project. A common approach: apply the Section 44 credit to eligible expenditures up to its limits, then use the Section 190 deduction for qualifying barrier-removal costs that exceed the credit's reach. The credit and the deduction address overlapping but not identical categories, so coordinating them is where a tax professional adds value.

The combined effect is that an eligible small business doing accessible-parking work may be able to recover a significant portion of the cost through the credit and deduct more of the remainder, substantially lowering the net out-of-pocket cost of compliance. Given that much accessible-parking work is the readily achievable, low-cost kind described in our readily achievable barrier removal page, these incentives can cover a meaningful share of a modest project.

What This Means for a Parking Project

For an Oregon business planning ADA parking upgrades, the practical takeaways:

• Document the work. Keep clear records of the accessible-parking expenditures, what was done and what it cost, since both incentives require substantiating eligible expenses.
• Get the lot assessed. An ADA compliance audit process defines the scope of needed work, which is also the scope of potentially eligible expenditures.
• Talk to your tax professional. Whether you qualify for the credit, the deduction, or both, and how to claim them, depends on your business's size, structure, and tax situation.
• Factor the incentives into the decision. The net cost of compliance, after the credit and deduction, may be lower than the sticker price, which can change the calculus on doing the work proactively.

The incentives do not change what your lot owes under the ADA, but they can change how much that compliance actually costs you. The general accessible-parking requirements remain as covered in our ADA parking compliance guide for Oregon.

A Word of Caution

These incentives have specific eligibility rules, annual limits, and documentation requirements, and they change over time as the tax code is amended. The figures and thresholds are not static, and what qualifies as an eligible expenditure has its own definitions. This page is a general orientation, not a substitute for professional tax advice. Before relying on either incentive, confirm the current rules and your eligibility with a qualified tax professional who can apply them to your situation.