This bill establishes a refundable tax credit for eligible individuals to cover 35% of home accessibility improvement costs, up to $10,000 annually and $30,000 lifetime, with income limitations and inflation adjustments.
Angus King
Senator
ME
This bill introduces a refundable tax credit for eligible individuals who make home accessibility improvements, such as installing ramps or modifying bathrooms. The credit covers 35% of improvement expenses, with a maximum of $10,000 in expenses qualifying for the credit in a single tax year and $30,000 over all tax years. The credit is subject to income limitations, and the bill requires the Treasury to provide guidance on qualifying improvements and conduct public outreach. It applies to tax years beginning after December 31, 2024.
New Bill Proposes 35% Tax Credit for Home Accessibility Upgrades, Capped at $30K Lifetime
This proposed legislation introduces a new refundable tax credit aimed at making homes safer and more accessible for certain individuals. If enacted, Section 36C of the Internal Revenue Code would allow eligible taxpayers to claim a credit for 35% of the costs spent on specific home modifications, starting for tax years after December 31, 2024. The core idea is to help offset the expenses involved in adapting a living space for accessibility needs.
Who Gets Help and For What?
The credit targets specific groups: individuals receiving disability or blindness benefits (under Social Security or Veterans Affairs), those certified as having a disability, or anyone aged 60 or older. Importantly, if you live with and care for a spouse or dependent who meets these criteria, you could also potentially claim the credit for improvements made to your shared home.
What kind of projects count? The bill defines "qualified improvements" as reasonable expenses that boost accessibility. Think practical upgrades like installing ramps or grab bars, widening doorways for wheelchair access, modifying kitchen counters or bathroom fixtures, or even improving lighting for better visibility. The Treasury Department is tasked with providing more detailed guidance on eligible expenses within 180 days of enactment and updating it regularly.
Crunching the Numbers: Limits and Phase-Outs
While the credit covers 35% of costs, there are caps. You can claim the credit on up to $10,000 worth of expenditures in a single tax year. There's also a lifetime limit: the total qualified spending across all years can't exceed $30,000 per individual. Being "refundable" means that even if the credit amount is more than the taxes you owe, you could get the difference back as a refund.
However, there's an income test. The credit amount starts to decrease if your modified adjusted gross income (MAGI) goes above certain thresholds: $400,000 for joint filers/surviving spouses, and $200,000 for heads of household and single filers. These spending caps and income thresholds are set to be adjusted for inflation starting in 2026.
Making it Work: Outreach and Oversight
The bill doesn't just create the credit; it tries to ensure people know about it and that it works as intended. It directs the IRS Commissioner to make the credit accessible and conduct outreach. It also requires data sharing between Social Security, Veterans Affairs, and the Treasury to help administer the program smoothly.
Furthermore, the Government Accountability Office (GAO) is mandated to conduct a study within three years of enactment. This study will look at how effective the credit is, who's using it, and suggest potential improvements, providing a check-up on whether the policy is hitting its mark in the real world.