Compliance with the Americans with Disabilities Act (ADA) is necessary, but small businesses struggling to fund digital accessibility improvements may be eligible for assistance through the IRS Disabled Access Credit.
What is the Disabled Access Credit?
The Disabled Access Credit is a tax incentive designed to encourage businesses to comply with Title III of the ADA, which covers public accommodations, including both physical spaces and websites.
Eligible small businesses can receive a credit covering 50% of accessibility-related expenses above $250, up to a maximum credit of $5,000 per year.
For example:
- A business spends $4,500 on website accessibility improvements. They can claim a $2,125 credit (50% of $4,250).
- A business spends $11,000. The maximum credit of $5,000 applies.
- A business spends $250. No credit is available, as the first $250 is excluded.
Tax credits directly reduce your tax burden, unlike deductions. In this case, the IRS helps subsidize accessibility efforts, potentially lowering the overall cost of compliance.
Who is eligible?
The credit is available to small businesses with gross receipts of $1 million or less or no more than 30 full-time employees in the past year. If your business doesn’t qualify, check with a tax professional to explore other state-level programs.
What expenses are eligible?
Expenses qualify if they aim to:
Remove barriers preventing accessibility for people with disabilities.
Provide interpreters or assistive technologies for individuals with hearing or vision impairments.
Modify equipment or devices for people with disabilities.
Accessibility improvements must specifically address these goals to qualify for the tax credit. General website redesigns may not be covered, but improvements in line with WCAG standards (such as providing captions for videos) are often eligible.
Accessibility is a business investment
Accessibility benefits all users. Features like video captions and dark mode enhance user experience for everyone. Beyond meeting legal requirements, inclusive design can improve customer engagement, search engine rankings, and overall business performance.
Apricity Web Solutions is not a legal expert or accounting expert. Consult a tax professional to see if the Disabled Access Credit can help offset accessibility costs.
Text generated by ChatGPT, OpenAI, October, 2024, https://chatgpt.com, edited for style and content
