Often, modifications must be made to assist individuals with disabilities with living independently in their home. According to an article “Funding for Home Modifications & Programs” written by the National Association of Home Builders, approximately 80% of home modifications, renovations and repairs are paid by the primary occupants of the residency. But, did you know that the Federal Government offers tax incentives for individuals with disabilities who make accessible modifications to their home?
Modifications to a home can assist individuals in living independently.
If your main purpose for installing special equipment is medical care for your disability, a percentage of the cost may be included on your Federal Income Tax under “Medical and Dental Expenses.” As stated on the IRS publication 502, “you can deduct part of your medical and dental expenses that is more than 7.5% of your adjusted gross income.”
Additionally, there are terms you must follow, and as always, you should consult with a tax professional to determine what is best for your situation.
One of the terms that one must consider is the property value. As IRS.gov explains, if the value of your property increases because of a reasonable home improvement, only a portion of the improvement may be included as a medical expense. However, if the property value doesn’t increase, the entire cost can be included as a medical expense, as long as it’s a reasonable cost for the modification.
There are certain improvements made to your home for accessibility purposes that don’t usually result in an increase in property value; therefore, the entire cost can be included as a medical expense. Some of these accessible accommodations include, but are not limited to1:
- Constructing an accessible entrance or exit ramps for your home
- Widening doorways at entrances or exits to your home
- Widening or otherwise modifying hallways and interior doorways
- Installing railings, support bars, or other modifications to bathrooms
- Lowering or modifying kitchen cabinets and equipment
- Moving or modifying electrical outlets and fixtures
- Installing porch lifts and other forms of lifts (but elevators generally add value to the house)
- Modifying fire alarms, smoke detectors, and other warning systems
- Modifying stairways
- Adding handrails or grab bars anywhere (whether or not in bathrooms)
- Modifying hardware on doors
- Modifying areas in front of entrance and exit doorways
- Grading the ground to provide access to the residence
Accessible lifts may be able to be included as a medical expense.
In addition, the amounts you pay to continue to operate and upkeep the improvement may qualify as a medical expense.
What if you don’t own a home, but rent? According to the IRS Publication 502, “amounts paid by a renter to buy and install special plumbing fixtures in a rented house for a person with a disability, mainly for medical reasons, are medical expenses.”
Assistance with housing is one of the many areas where Living Well With A Disability™ can assist you. Through the survey, we can help you find options for funding home modifications, understanding what type of modifications can be made, or finding a builder who understands accessibility. If you’re in need of home modifications, or know someone who is, pass along the hotline number (1-877-865-4893) to start living independently!
1 Internal Revenue Service. (2011). Publication 502 – Main Content – Capital Expenses. Retrieved December 13, 2011 from http://www.irs.gov/publications/p502/ar02.html#en_US_publink1000178902