New Tax Credit Offers 35% Refund on Home Accessibility Upgrades, Capped at $10,000 Annually

This legislation introduces a brand-new, refundable federal tax credit designed to ease the financial burden of making homes accessible. Starting in 2025, if you’re a homeowner and you or someone living with you is elderly (age 60+) or has a disability, you can claim a credit equal to 35% of the money you spend on qualified home accessibility improvements. The bill caps the eligible expenses at $10,000 per year, meaning the maximum credit you could receive is $3,500 annually, with a lifetime maximum benefit of $30,000 in expenses.

The Fine Print on Who Gets the Check

This credit is refundable, which is key—it means if the credit is larger than the taxes you owe, the IRS sends you the difference. But it’s not a free-for-all. The bill defines a “qualified individual” as someone who is age 60 or older, or someone who can prove disability status through the VA, Social Security, or a physician’s certification. This certification must show a severe functional limitation expected to last at least 12 months. The bill is clear that this credit is aimed squarely at helping people age in place or live independently.

What Counts as a Qualified Upgrade?

If you’ve ever had to retrofit a home for accessibility, you know the costs add up fast. The bill provides a long list of what qualifies, and it’s pretty comprehensive. Think practical modifications like installing entrance ramps, widening doorways, putting in grab bars, or upgrading to roll-under sinks and curbless showers. It also covers more extensive changes like adding a main-floor bedroom or installing a porch lift. The Treasury Secretary has 180 days to publish official guidance and an updated list, but the intent is clearly to cover necessary structural and functional changes that increase mobility and safety.

The Income Speed Bump

This credit is designed to help, but it does include income phase-outs, which is where things get complicated for higher earners. The credit starts to disappear if your Modified Adjusted Gross Income (MAGI) exceeds certain thresholds: $400,000 for joint filers and surviving spouses, and $200,000 for everyone else. If your income goes above those levels, the credit amount you qualify for gets reduced proportionally over a specific income range. For example, joint filers lose the credit entirely once their MAGI hits $500,000. Essentially, the credit is targeted to assist the vast majority of working and middle-class families, but it tapers off for those at the top end of the income scale.

Real-World Impact and Trade-Offs

For a family needing to install a $12,000 lift system for an elderly parent, this credit is a game-changer. They could claim $3,500 (35% of the first $10,000 spent) back on their taxes, instantly lowering the cost of a critical safety upgrade. This bill recognizes that preventing falls and enabling independent living often saves the healthcare system money down the road, which is why the Government Accountability Office (GAO) is required to study the credit’s effectiveness on reducing hospital visits and Medicare costs. A few things to note: married couples who file separately are explicitly barred from claiming this credit, and you cannot double-dip—if you use an expense for this credit, you can’t use it for any other tax benefit.