$5,000 Disabled Access Credit available for ADA-compliant websites
Maximize savings: how to claim the $5,000 disabled access tax benefit for your business
Did you know that you can earn a significant tax credit for making your website ADA-compliant? The Disabled Access Credit is a valuable tax incentive designed to help businesses comply with Title III of the Americans with Disabilities Act (ADA). This section of the ADA applies to places of public accommodation—and that includes websites.
While most business owners are aware of the importance of making their locations and websites accessible to everyone, many do not know that they can recover a significant portion of their investment in accessibility improvements. Read this guide to find out whether you are eligible for this tax credit of up to $5,000.
The Disabled Access Credit: supporting accessible businesses
The Disabled Access Credit covers up to 50% of eligible expenses incurred while improving accessibility, up to a maximum of $5,000. Unlike a deduction, which reduces taxable income, a tax credit directly reduces your tax liability, effectively offering you a cash rebate for making accessibility improvements.
Let’s say that you invest $3,000 in making your website accessible this year. When you file your taxes, you can claim the Disabled Access Credit to reduce your taxes by $1,500. The process to claim this credit is straightforward: you simply need to fill out the appropriate form (don’t worry, it’s short) and send it with your taxes.
Source: IRS Form 8826
What expenses can businesses claim?
Certain businesses can claim the Disabled Access Credit for expenses incurred in order to improve accessibility and bring their websites into line with legal requirements. More specifically, the spending must be “reasonable and necessary” to achieve one of the following:
- Remove barriers that prevent access for people with disabilities.
- Provide qualified interpreters or other methods for making audio materials available to individuals with hearing impairments.
- Make visual materials accessible to individuals with vision impairments.
- Acquire or modify equipment or devices for individuals with disabilities.
An accessible website is a critical step in achieving these purposes. However, it's important to note that a general website redesign may not qualify. The improvements must be directly related to enhancing accessibility. For this reason, we recommend installing an accessibility widget on your website to clearly demonstrate that you’ve made a targeted investment in accessibility. At Gravity Web Studio, we include this as a standard feature in all our website builds.
For more details on what makes a website ADA compliant, refer to our article on making your website ADA compliant.
How the credit works in practice
The Disabled Access Credit covers 50% of eligible access expenditures up to $10,250, with a maximum credit of $5,000. This credit can be applied to expenses such as barrier removal, providing accessible formats like Braille or large print, hiring sign language interpreters, and purchasing adaptive equipment. Let’s take a closer look at how this can benefit your business:
- If you spend $7,000 on website accessibility, you can claim a credit of 50% of the eligible $7,000, which equals a $3,500 credit.
- If you spend $13,000 on accessibility improvements, you can claim the maximum credit of $5,000.
- If your accessibility expenses total $250 or less, you will not receive a credit since the first $250 is not eligible.
It’s important to understand that tax credits are different from deductions. While deductions reduce your taxable income, credits directly reduce the amount of tax you owe. In essence, the IRS is helping subsidize your accessibility efforts, significantly lowering the cost of making your website accessible.
Does your business qualify?
The Disabled Access Credit is available to small businesses that meet specific criteria under Section 44 of the IRS Code. To qualify, your business must have:
- gross revenues of $1 million or less in the previous tax year, or
- 30 or fewer full-time employees.
If your business doesn’t meet the eligibility criteria for the Disabled Access Credit, consider speaking with your tax professional. There may be state-level programs that offer similar benefits for businesses committed to digital accessibility.
Keep in mind that apart from this credit, all businesses can claim a tax deduction for accessibility expenses under Section 190 of the IRS Code, with a maximum deduction of $15,000 per year.
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