“Tax season” and “good news” don’t naturally go together. However, there is good news for small businesses that have already invested in web accessibility: the Disabled Access Credit. The Internal Revenue Service (IRS) offers a tax credit through form 8826 to help recoup some of the cost of making your website more accessible to individuals with disabilities. If you haven’t already made your website more accessible, these tax incentives might help put ADA compliance in your web development plans this year.
What is the Disabled Access Tax Credit?
The Disabled Access Tax Credit is a tax incentive providing small businesses with gross receipts of one million dollars and less or those that employ 30 or fewer full-time employees, that have made accessibility improvements to their website. This credit can help offset the costs of those modifications and provide financial relief to small businesses working to make their spaces accessible to everyone.
Unlike tax deductions that reduce taxable income or the tax owed, a tax credit gets subtracted from the tax owed. For example, the Disabled Access tax credit covers 50% of the eligible expenditures made during the previous tax year, with a maximum limit of $10,250.
Does the Disabled Access Tax Credit cover Web Accessibility?
Yes, the Disabled Access Tax Credit covers website accessibility as web accessibility is becoming increasingly important. The Department of Justice in 2018 stated that websites are considered a place of public accommodations, Therefore, the ADA covers websites and mandates accessibility in the digital space, allowing the Disabled Access tax credit to be applied to businesses that invest in owning and operating accessible sites.
Many accessibility practices or implementation types qualify as expenditures. Still, there are several accessibility elements when calculating your annual accessibility fee. These include web accessibility solutions or tools that optimize websites. Here are some key variables to consider in your annual accessibility fee:
- Website Modifications
- Page Format and Hierarchy
- Live Chat Services
- File and Media Fixes
- Consulting Service Fees
Eligibility for the Disabled Access Tax Credit
The Disabled Access Tax Credit is available to small businesses with a maximum of $1 million in annual revenue or fewer than 30 full-time employees. The development costs associated with the necessary changes to the website to make it more accessible with the standards outlined in the ADA such as the Web Content Accessibility Guidelines (WCAG) for websites to be eligible. This includes adding alternative text to images, providing video captions, and ensuring the website can be navigated using only a keyboard.
What are the Stipulations?
The good news is that the Disabled Access Tax Credit can be applied for and earned annually. However, you can’t carry expenditures over to claim a credit exceeding the prior year’s expenditure limit. But, if the credit amount exceeds the taxes you owe, you can roll the unused credit into the following year.
The Disabled Access Tax Credit covers the following accessibility and ADA-related expenditures:
- Web accessibility & optimization
- Language interpreters
- Adaptive equipment
- Printed materials
- Elimination of physical obstacles
- General consulting
Is It a One-Time Deal?
No, in fact you can get this credit any year ADA accessibility work is done on your website. This tax break is such a powerful incentive that many small businesses have adopted a policy of annual ADA accessibility website audit/ reviews.
How to Apply for the Disabled Access Tax Credit
There is no need to apply, simply complete the IRS Form 8826 and submit it with your yearly tax return. In addition, it must include information about the accessibility improvements made, the expenses incurred, and the credit calculation. You can find Form 8826 on the IRS government website, where you can further research the rules and stipulations regarding the Disabled Access Tax Credit. You can also read more on the IRS Tax Credits and Deductions page on the Americans with Disabilities Act website.
Don’t forget to consult with a tax professional before you send in your comprehensive return files. If your tax professional is unaware of the Disabled Access Tax Credit, tell them the form number (8826). They can quickly fill out the form and state the amount spent on accessibility efforts, speeding up the process and ensuring it’s correct!
Web Accessibility & the Disabled Access Tax Credit
The 8826 form can be a valuable tool for small businesses that engage ADA accessibility developers to work on their websites. The 8826 Disabled Access Tax credit has made it possible for many small businesses to make ADA remediation an ongoing process to ensure the website remains accessible to all users. By making sure your website is compliant and accessible, you can help ensure that your business is reaching the widest possible audience and staying in compliance with the law.
Suppose you are a small business owner looking to make your website more accessible and take advantage of the Disabled Access Tax Credit. In that case, we encourage you to reach out and schedule a 15-minute ADA Briefing with our web accessibility experts at 216digital.