Starting January, 1st 2019, an Income Tax Credit of up to $5000 is available from the Department of Local Affairs (DOLA) Grant for home modifications for people with disabilities or special needs. This is part of Health Bill HB18-1267.
Prior to this bill there have not been any tax break opportunities for people with disabilities or special needs who are not veterans to adapt their home. HB18-1267 was passed last October and it provides a great opportunity if you have always planned on modifying your home for safety, health, and welfare reasons, but were unable to do so because of financial restraints. While this bill doesn’t give you cash in hand at time of construction, you will receive a credit towards your tax liability when you file your taxes (as long as the cap is not reached).
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Speak to your tax professional to learn how this impacts your tax liability and qualification for this program!
You will have to apply, qualify, and have your modification approved. However, it’s exciting to know that this bill has a grant of $1,000,000 per tax year available for these expenses, and it is available for changes made and applied for between 2019 and 2023.
Here are some of the requirements for eligibility of the disabled Coloradan resident:
1. Have a disability or special needs.
2. The home must be located in Colorado.
3. The property must be your primary residence. There were no clear indications about what kind of construction this primary residence has to be.
4. Have an adjusted family income of $150,o00 or less for the 2019 tax year.
5. You can apply if you are NOT the home owner, but you must have the home owner’s permission to make the modifications (of course). Sadly, if the person with disability is a dependent in your home you will NOT qualify for this tax credit. This is very disappointing, as this excludes many families with special needs minors or adults.
6. This tax credit is not applicable to homes under construction. The home has to have been completed and closed on.
Requirements of the improvement to be accepted:
1. The improvement has to be necessary for health, safety, and welfare of the eligible applicant.
2. Improve the qualified individuals independence and/or mobility within the home.
3. Might be required due to an eligible person’s disability or illness, and to allow this person to age in place.
4. It has to meet the Division of Housing’s Home Modification Construction Specifications.
5. The modification has to be completed in the tax year for which the individual received the tax credit.
Related Reading: Homes Designed for Aging in Place
Details about the Home Modification Tax Credit
Application Process
There are three steps in the application process. First, there is an application survey where it is determined if the applicant and their home qualify. Then there is the initial application in which detailed information about the proposed modification is submitted to the DOH (Division of Housing), and it is verified that the retrofit is eligible for the program. The final application reports the completed modification, which may be submitted as soon as the project is completed.
Inspection
The DOH will perform inspections to ensure that modifications were made properly.
Issuance of the Tax Credit
Tax credit certificates are issued in the order that the completed final applications are received. Once the cap of the one million dollar amount is reached, these issuances are stopped.
If you have any questions, please contact DOLA at dola_homemodtaxcredit@state.co.us or at 303-864-8425 or 303-864-7825.
Related Reading: PCSing with an Exceptional Family Member
