Are Wheelchair Vans Tax Deductible?

If you own or are looking to buy a wheelchair van, you may have asked yourself the question: are wheelchair vans tax deductible?

According to IRS Publication 502, "the cost of special hand controls and other special equipment installed in a car for the use of a person with a disability" can be deducted from your taxes.

This means that while the full cost of your vehicle cannot be deducted, you will be able to save money on the cost of the conversion. Basic wheelchair van conversions can cost as much as $45,000, so you can still qualify for a sizable deduction.

Wheelchair vans qualify for tax deductions as a medical expense. The IRS primarily describes medical expenses as payments made to doctors and medical services that help diagnose, treat, and prevent disease, but also includes "the costs of equipment, supplies, and diagnostic devices needed for these purposes". This is why the full vehicle is not deductible, but the equipment inside of it is.

To help determine how much of a deduction you may be eligible for, you can find the difference between a vehicle converted for accessibility versus the same model that is not converted for accessibility.

For example - if a regular 2021 Chrysler Pacifica costs $20,000 and a 2021 Chrysler Pacifica with wheelchair accessibility modifications costs $46,000, you may be eligible for up to $25,000 in tax deductions.

Although the equipment inside a wheelchair can is tax deductible, there are some limitations to how much you can deduct.

You may only deduct your total medical expenses that exceed 7.5% of your adjusted gross income (AGI). To find out how large of a deduction you're allowed, use Schedule
A (Form 1040) when filing your taxes.

Since your total medical expenses will likely include costs related to the diagnosis, treatment, and mitigation of your health condition, this will impact how much you are legally allowed to deduct from your wheelchair van.

According to the IRS, any part of a vehicle that is a "special design" has the potential to be deducted. "Special design" means that the equipment or modification makes the vehicle different from the same version that can be purchased from the general manufacturer's assembly line.

There are several categories of conversion equipment that can be deducted from your taxes, including:

• Wheelchair lifts

• Hand controls

• Wheelchair ramps

• Pedal and steering wheel extensions

• Transfer seats

• Wheelchair securement devices

If you're unsure about a certain piece of equipment, be sure to ask the certified mobility consultant at your dealership.

Yes, some of your yearly transportation costs can also qualify for a tax deduction. Certain out-of-pocket expenses like the cost of gas and the mileage you drive for medical reasons qualify as medical expenses. This typically includes trips to doctor's appointments and long-distance trips to certain medical specialists.

You can also claim a deduction on tolls and parking fees, as long as the expense occurred during a medical trip.

To qualify for these potential tax breaks, the IRS requires that you keep track of all the trips you take in your wheelchair van. This is so they can verify that it is actually being used for medical purposes and not personal leisure. It's a good idea to note the date, time, destination, and total mileage traveled for every trip you take, as well a: any maintaining all parking or toll receipts.

If you have trouble maintaining your total mileage driven, you can use the current standard medical mileage rate set by the IRS: 21 cents per mile driven. For example, if you drive 1,000 miles to medical appointments in 2024, up to $210 can be deducted from your taxes.

Keep in mind that several common transportation-related expenses are not eligible for a deduction, such as:

• Vehicle deprecation
• Car insurance
• Maintenance fees and repairs
• Mileage and gas spent going to and from work
• Mileage and gas spent on travel purely for personal reasons
• Mileage and gas spent on travel that only improves one's health generally, like taking a vacation to boost your mental health

Any wheelchair user that has purchased an accessible van in the current tax year may qualify for the disability tax credit. To qualify, you must have a letter or prescription from a licensed physician that justifies your medical need for a wheelchair van.

In most states, the same letter or prescription can also exempt your wheelchair van from state and local sales taxes.

When calculating your deductible medical expenses, you can include your own personal expenses as well as any that you paid for a dependent or spouse - either when the expense occurred or when it was officially billed. Dependents can either be a child or a qualifying relative and must meet the following criteria defined by the IRS:

• Qualifying children must:

·         Be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them.

·         Be under the age of 19 at the end of the year and younger than you (or your spouse if filing jointly).

·         Be under the age of 24 at the end of the year, a full-time student, and younger than you (or your spouse if filing jointly).

·         Be any age and permanently and totally disabled.

·         Have lived with you for more than half of the year.

·         Have not provided over half of their own support for 2023.

·         Have not filed a joint tax return, other than a claim a refund.

• Qualifying relatives must:

·         Be your son, daughter, stepchild, foster child, or any descendant of them.

·         Be your brother, sister, half brother, half sister, or a son or daughter of any of them.

·         Be your father, month, or an ancestor or sibling of either of them.

·         Be your stepsibling or stepparent, or any form of in-law.

·         Be someone who lived with you all year as a member of your household.

You may also claim expenses on adopted children - either legally adopted or those you care for as your own.

As mentioned before, you have to fill out Schedule A (Form 1040) to claim a disability deduction.

You also need to complete line 316 of Schedule 1 on your tax return and enter the same amount on line 316

on Form T2201 (the Disability Tax Credit Certificate).

If someone else is claiming the deduction on your behalf, have them claim it on line 318 of their tax return.

Taxes in general can be tricky to navigate, and finding tax breaks for your wheelchair accessible vehicle is no different. As with all tax challenges, you should reach out to a trusted tax professional to make sure you are following all of the correct procedures. They will also ensure that you are maximizing your potential deductions.

If you are looking for a wheelchair van, or have purchased one through us already, the certified mobility consultants at AZ Mobility are here to help you make both your purchase and your taxes smooth. With over 20 years of experience, you can trust us to provide you the information and documents you need to qualify for a tax deduction in your state.

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