New Tax Credit Offers 35% Refund on Home Accessibility Upgrades, Capped at $30K Lifetime

This new legislation sets up a refundable tax credit to help people pay for making their homes easier to live in—think ramps, grab bars, and curbless showers—if they or someone they live with is managing a disability or is over 60. Starting in 2025, you can claim back 35% of the money you spend on these approved home accessibility improvements. This is a big deal because it’s a refundable credit, meaning if you qualify, you get the money back even if you don't owe any taxes. However, there are limits: you can only count up to $10,000 in expenses per year, and there's a strict lifetime cap of $30,000.

Who Gets the Keys to the Credit?

To tap into this credit, the improvements must be for a “qualified individual.” This includes you, your spouse, or a dependent who lives with you and who meets one of three criteria: they receive VA or Social Security disability benefits, they are 60 or older, or they have a doctor sign a specific disability certification. This is where the rubber meets the road: if you’re a working professional caring for an aging parent or a spouse with a long-term injury, this credit is designed to ease the financial burden of necessary modifications. For example, installing a porch lift for a spouse who uses a wheelchair could cost $15,000; this credit would knock the price down by $5,250 in the first year alone.

The Fine Print: Income Limits and Exclusions

Like many tax breaks, this one starts to disappear for high earners. If you file jointly, the credit begins phasing out once your Modified Adjusted Gross Income (MAGI) hits $400,000, and it’s completely gone at $500,000. For single filers, the phase-out starts at $200,000 MAGI and disappears at $250,000. If you’re pulling down that kind of income, you likely won't see the full benefit. More importantly, if you are married but file separately, you are completely excluded from claiming this credit, which is a specific exclusion that often impacts certain financial planning strategies.

What Exactly Counts as an Upgrade?

The bill lists a wide range of eligible expenses, covering everything from the obvious to the practical. It includes installing ramps, widening doorways, putting in grab bars, modifying bathrooms (like roll-under sinks or curbless showers), and even adding a bedroom or full bathroom on the main floor. They also cover specific equipment like porch lifts, adaptive fire alarms, and remote health monitoring technology. The Treasury Secretary, working with HUD and HHS, is tasked with creating and maintaining an official list of these modifications, which they must start within six months of the law passing. This is a key detail because it means the IRS won't be the final word on what qualifies; a specific interagency list will define the scope, and that list needs to be updated every two years.

Long-Term Impact and the $30K Question

While this credit is a significant step forward for independent living, the $30,000 lifetime cap is worth noting. For minor modifications, this is plenty. But for someone needing extensive, whole-house renovations—like installing an elevator, widening every hallway, and completely remodeling a kitchen and two bathrooms for full accessibility—that $30,000 might not cover 35% of the total cost. The Government Accountability Office (GAO) is required to study the effectiveness of this credit within three years, looking at whether it actually reduces hospital visits or improves daily living. That review is crucial because it will provide the data needed to potentially adjust the credit for inflation (which is already slated to start in 2026) or, more importantly, to argue for raising that $30,000 cap down the road if it proves too low to support comprehensive accessibility.