According to the Americans with Disabilities Act (ADA), businesses are required to make “places of public accommodation” fully accessible to people with disabilities – and a recent surge in lawsuits is pointing out that this includes a business’s website.
As companies scramble to ensure that their code is accessible to a myriad of disabilities and is compatible with assistive technology, they are finding that this undertaking is a substantial cost not originally factored into their budget before they became aware of the legal risk, or of the target market they were excluding. That’s where this helpful tax incentive comes in.
In the case of this IRS initiative to assist with achieving ADA compliance, the deductions are a tax credit for 50% of the allowable amount for eligible expenditures.
Because implementing sophisticated testing or remediation tools can often be cost-prohibitive to businesses with smaller budgets, the IRS is offering a tax credit and tax deduction to incentivize these businesses earning gross receipts under $1 million or having no more than 30 FTEs.
The IRS lists the following accessibility improvements as eligible for the incentive:
Web accessibility initiatives easily meet these criteria when they remove errors in the code that make a business’s website unperceivable or inoperable by a person with disabilities, and because it may add an alternate, better-suited way for disabled users to access a business’s goods and services.
If your business and the types of improvements qualify for the tax credit, you can take a tax credit for 50% of eligible expenditures (listed above) over $250 up to $10,000 a year. In other words, your tax bill can be reduced by up to $5,000.
You apply for the disability access tax credit on your business tax return, using IRS Form 8826. Use the following steps to fill out the form:
Written by Raegan Bartlo