A Guide to the ADA Tax Credit: How to Apply, Who Qualifies, and More
Disabilities can make it harder for people to access websites. Still, businesses can take steps to improve this experience and make it easier for these people. The IRS offers an ADA tax credit to incentivize businesses to make their websites accessible. Keep reading to learn about this credit and how you can claim it.
Disclaimer: we are not tax professionals. Please confirm with your CPA.
Here is what we know through discussion with many of our clients and our CPA:
- Website accessibility initiatives (inspections and remediation) qualify for the Disabled Access Credit.
- Small businesses (i.e., less than $1M in revenue OR less than 30 employees) qualify for the Disabled Access Credit.
- The Disabled Access Credit is a TAX CREDIT, not a tax deduction.
- Expenditures between $250-$15K qualify for a 50% tax credit.
What Is the ADA Tax Credit?
The ADA tax credit is listed under Section 44 in the IRS codes. This credit can cover 50% of the expenses made in the previous tax year.
For example, if you spent $500 on an accessibility inspection for your website, you could subtract $250 from that. This means you'll have $250 left over that is eligible and receive 50% of what's left over. This means you'd get $125 in credit and only have to pay $375 a year on the website inspection (after the credit).
Who Is Eligible?
When managing your budget for the next year, the ADA tax credit is available for businesses that make less than $1 million or have less than thirty full-time employees.
If you meet either of those requirements, you can then file for the credit.
If you purchased a manual inspection of the accessibility of your website, this will qualify, depending on how much was spent.
How Does This Apply to Accessible Websites?
The ADA was initially written to apply the regulations and rules to the Internet and make it more accessible. The ADA covers websites, and it mandates that they must be digitally accessible.
The tax credit can apply to businesses that are investing in creating an accessible website to accommodate those with a disability.
They can also be used for fees on ADA consulting services, removing architectural barriers, producing accessible printed materials and adaptive equipment, or hiring sign language or interpreters.
How to Apply
You'll need to first refer to the IRS's Tax Incentives for Improving Accessibility Fact Sheet. This will give you even more information about this tax credit and how to apply for it.
Once you've ensured that your business is eligible, you'll need to find Form 8826. You'll need to fill this out and attach it to your annual tax return. You can find this form on ADA.gov.
Other Benefits of Being Website Accessibility Compliant
In addition to being able to claim this ADA tax credit, you'll also enjoy other benefits of having an accessible website. For example, having an accessible website will help reduce the chances of an accessibility complaint. You'll also have an accessible website that makes it easier for your disabled customers and employees.