This bill introduces a refundable tax credit for qualified home accessibility improvements, aimed at assisting individuals, particularly those with disabilities or over 60, in making their homes more accessible.
Haley Stevens
Representative
MI-11
This bill introduces a refundable tax credit for qualified home accessibility improvements, aimed at helping individuals make their homes more accessible. The credit covers 35% of improvement expenses, with annual spending capped at $10,000 and a lifetime limit of $30,000, subject to income-based reductions. It targets individuals receiving disability or pension benefits, those with disability certifications, or individuals aged 60 and older, along with their cohabitating spouses or dependents. The bill also mandates inflation adjustments, guidance from the Treasury, IRS outreach, data sharing between agencies, and a GAO study on the credit's effectiveness.
New Bill Proposes 35% Tax Credit for Home Accessibility Upgrades, Capped at $10K Annually
This bill introduces a new refundable tax credit, officially called Section 36C in the tax code, designed to help folks cover the costs of making their homes safer and more accessible. Starting with the 2025 tax year, eligible individuals could claim back 35% of what they spend on specific home modifications, up to $10,000 in qualifying expenses per year. There's also a lifetime cap of $30,000 per person on these expenses.
Who Gets a Hand and What Fixes Qualify?
So, who's eligible? The credit targets individuals receiving disability benefits (from Social Security or the VA), anyone officially certified as having a disability, and people aged 60 or older. If you're the spouse or a dependent living with someone who qualifies, you might be eligible too. The goal is to ease the financial burden of necessary upgrades. Think practical changes like installing ramps or grab bars, widening doorways for wheelchair access, modifying kitchen counters or bathroom fixtures, or even improving lighting for better visibility. It's a refundable credit, which is key – it means even if you don't owe any federal income tax, you could still get this money back as a refund.
Mind the Caps: Income Limits and Spending Rules
While the credit aims to help, it's not unlimited. Besides the $10,000 annual and $30,000 lifetime caps on expenses used to calculate the credit, there are income limits. If your modified adjusted gross income goes above certain thresholds ($400,000 for joint filers, $200,000 for single filers and heads of household, with specific phase-out ranges), the amount of credit you can claim starts to shrink. This targets the benefit towards middle and lower-income households. It's also worth noting the bill requires these dollar amounts to be adjusted for inflation starting in 2026, so they should keep pace with rising costs over time.
Making it Work: Guidance and Oversight
The bill doesn't just set up the credit; it includes steps for implementation. The Treasury Department is tasked with providing clear guidance on what specific improvements qualify, potentially adding more to the list. The IRS is directed to conduct public outreach to make sure people know about the credit and how to claim it. To ensure things run smoothly, agencies like the Social Security Administration and the Department of Veterans Affairs will share necessary data with the Treasury. Finally, the Government Accountability Office (GAO) is required to study the credit's effectiveness within three years and suggest improvements, providing a built-in mechanism to see if it's really helping people as intended.