ADA Web Accessibility Tax Credits

As a business owner, you may find yourself seeking new ways to improve business, increase profits, and reduce costs. You also find yourself seeking ways to serve better, from customers, to employees, to partners and more. Many business owners across Florida are finding they need to take action now, to make positive changes to ensure their website is accessible to all, including those with disabilities. Luckily, the IRS has taken initiative to assist tax payers in their efforts to achieve ADA compliance, and created the Disabled Access Credit.

ADA Applies to All Digital Content in Addition to Physical Locations

Originally signed into law by President George H.W. Bush, the authority of the ADA results from the primary civil rights law, the Commerce Clause of the Fourteenth Amendment to the U.S. Constitution, which is overseen by the Civil Rights Division of the Department of Justice (DOJ). The ADA is a broad application of accessibility standards which apply to an even broader variety of businesses, including commercial facilities and those who provide public accommodations. ‘Public accommodation’ is defined as any private entity whose operations effect commerce, so basically every business is included. It’s Title III of the ADA specifically that requires businesses to make accommodations for the disabled public to access the same services as those patrons who are not disabled. Physical locations and all digital content are included, such as your website. For the tax credit you attach IRS form 8826 Disabled Access Credit to your tax return and attach IRS Form 3800 General Business Credit. Review the ADA.gov Tax Incentives for Improving Accessibility Fact Sheet.

Who Does the Disabled Access Tax Credit Apply to? 

A qualifying business must have an annual revenue no greater than $1 million or have less than 30 FTEs or Full Time Employees.

How much can I receive back in the tax credit? (Up to $5,000 in tax credits)

As long as your business and the types of improvements done meet the criteria and qualify for the tax credit, you can receive a credit for 50% eligible expenditures (listed below) totaling at least $250 and up to $10,250 for a maximum credit of $5,000 per year.

Example A: Your company spent $12,000 on website accessibility updates, to ensure ADA compliance. You can claim $10,000 of that since you exceeded the limit of $10,250. 50% of $10,000 equals a tax credit of $5,000.

Example B: Your company spent $6,000 on website accessibility updates to ensure ADA compliance. Since only expenses greater than $250 qualify, subtract the $250 from your total of $6,000 to get $5,750. You can claim 50% of that amount as a tax credit, in this case, your tax credit could equal $2,875.

What Expenses are Eligible for the Tax Credit

The following accessibility improvements are listed by the IRS as eligible for the credit:

• Modifying or buying devices or equipment for persons with disabilities
• Providing interpreters or other ways of making audio materials available to those with hearing impairment and loss
• Removal of barriers that prevent a business from being usable or accessible to individuals with disabilities
• Providing readers or other means of making visual material available to the visually impaired

Web Accessibility is achieved by making specific modifications to the code that previously made a business’s website inoperable to those with disabilities, or cause those with disabilities difficulty in understanding the functionality of the website.

Additional Information on Website Accessibility Tax Credits

Remember that as long as eligibility requirements are adhered to, you could qualify for this credit year after year. This is a great advantage to small business owners across Florida, as the world of web accessibility guidelines are ever-evolving and will inevitably change as advancements in technology continue to improve year after year.

The tax credit and deduction can be used annually.  You may not carry over expenses from one year to the next and claim a credit or deduction fro the portion that exceeded the expenditure limit the previous year.  However, if the amount of credit you are entitled to exceeds the amount of taxes you owe, you may carry forward the unused portion of the credit to the following year.

There may be additional applicable credits at the state-level, since the Disabled Access Credit applies to Federal Taxes. There are no state taxes in Florida, however if you have moved recently this could apply to you.

Doing your research and hiring a few professionals to help you along the way will have your website on the right path of positive change for your impaired website.