Accessibility and Incentives: Your Guide to the ADA Tax Credit for Web Compliance
These days, more and more businesses are doing the right thing, integrating web accessibility practices into their digital activities. Whether that means automated tools, native accessibility techniques, or other services, these businesses can take advantage of solutions that will allow them to widen the welcome on their website to everyone, achieving ADA compliance in the same step.
Now, while affordable solutions exist for businesses of all sizes, the fees associated with accessibility invested in offline and online spheres can still increase. This is why the U.S. government has decided to promote and support these practices when they are compliant with the ADA, or the Americans with Disabilities Act, giving incentives to those who make and sustain their accessibility efforts with a tax credit (a credit being the amount subtracted from your overall liability after calculating your taxes).
What is the Americans With Disabilities (ADA) Tax Credit?
Found Under Section 44 of the IRS Code, this tax credit covers 50% of the eligible access expenditures from the previous tax year, where the maximum expenditure limit is $10,250. The first $250 of spending does not earn a credit, which you can subtract, giving you an upper expenditure limit of $10,000. Given this information, the highest amount of credit a business could receive would be $5,000.
Now, if a business spent $490 on GetAccessible, which would be the annual fee for the product, you’d subtract the first $250 to get the total amount that would count. 50% of that $240 is $120 in tax credit. Ultimately, your business is only spending $370 a year on GetAccessible.
Are you eligible for the ADA Tax Credit?
Any business that generates $1,000,000 or less during the year before filing or employs 30 or fewer full-time employees is eligible for the ADA tax credit benefit.
Where Do Currently-Accessible Websites Stand with ADA Tax Credits?
Initially, the ADA was drawn up to apply its rules and regulations to the internet landscape as it evolves. The ADA currently covers websites, mandating accessibility in the digital arena. In short, this means the tax credit applies to businesses presently investing in operating and maintaining accessible sites.
Many accessibility practices or implementation types are included in the list of qualifying expenditures. However, there are also various accessibility elements you need to consider when calculating your annual accessibility fee. This includes homepage adjustments, page structure and hierarchy, messaging (copy and content), and live chat support to make your site more accessible. Paid-for services like file and media remediation would also qualify as an expenditure.
What Stipulations Should You Be Aware of?
The good news is that the ADA tax credit can, each year, be applied for and earned. It’s important to remember that expenditures can’t be carried over from a previous year to claim a credit exceeding the expenditure limit of the prior year. However, if the credit amount you’re entitled to is more than the taxes you owe, you can roll the unused portion of the credit forward to the following tax year.
These accessibility and ADA-related expenses are covered by the tax credit:
- Website Accessibility Solutions or Optimization Tools
- Hiring Sign Language Interpreters
- Purchasing Adaptive Equipment
- Producing Accessible Formatting On Printed Materials (Braille, Large Print, Audiotape, Computer Diskette)
- Removing any Architectural Barriers with Facilities/Vehicles
- Consulting Service Fees
How to Apply for the ADA Tax Credit
Ready to get this tax credit? Here’s what you need to do: Start by reading the Tax Incentives for Improving Accessibility Fact Sheet to understand the basics. Once you determine whether you qualify, you can complete Form 8826 and send it in with your yearly tax return. Form 8826 can be found on the IRS website, which will also provide more information about the rules surrounding the Tax Credit.
More guidance and information can be found on page 2 of Form 8826, or you can visit the Americans with Disabilities Act website.
Ensure that before you sign off on and send in the comprehensive return files, you consult with a CPA or tax professional. If your CPA firm doesn’t know this tax credit exists, you can tell them about Form 8826. They’ll help you fill out the form correctly, stating the correct amounts spent on your accessibility efforts. Not only will this speed up the process, but it’ll also make you get the correct credit in return.