7 minute read
How the Disabled Access Tax Credit Can Help Your Business
Disabled Access Credit is a tax credit that’s provided to small businesses in order to promote web accessibility and disabled access compliance with the ADA, short for the American Disability Act. The tax credit covers 50% of the eligible expenses (maximum of $10,250) necessary for a business to make its facilities, websites, digital marketing, products, and services accessible to individuals with disabilities.
The Disabled Access Tax Credit can help cut down on the expensive costs of accessibility, making it more affordable for businesses to achieve ADA compliance. This allows companies to open up their services and products to a broader audience, promoting an inclusive environment for everyone.
This credit was established to help offset eligible expenses. It has been instrumental in incentivizing, promoting, and supporting accessibility for businesses.
What is the Disabled Access Credit, And How Does It Work?
The Disabled Access Credit, which is listed under Section 44 of the IRS Code, can help small businesses cover the costs of complying with the ADA. The tax credit covers 50% of eligible access expenditures, with a maximum limit of $10,250.
This means that businesses can receive a maximum credit of $5,000 annually. To be eligible, companies must have made access expenditures during the tax year. The first $250 of expenditures is not eligible for the credit and must be subtracted accordingly.
Are You Eligible For The Disabled Access Tax Credit?
The Disabled Access Tax Credit is a great way for businesses to save on the costs of making their websites and digital marketing accessible to people with disabilities and compliant with the ADA.
To be eligible, companies must have gross revenues of less than $1,000,000 the tax year OR 30 or fewer full-time employees during the year.
Check with your accountant to make sure that your business is eligible. If they need to familiarize themselves with the tax credit, refer them to form 8826 on the IRS website.
Don’t be the next company sued for poor ADA or WCAG website accessibility.
What Eligible Expenditures Can The Disabled Access Credit Be Used For?
While the ADA initially focused on physical spaces, it has since been updated to include digital areas as well. Businesses that invest in disabled-accessible websites and digital marketing services can qualify for the tax credit.
With the increasing popularity of doing business online such as shopping or streaming services, it’s more important than ever that companies make their websites and apps accessible to everyone.
Some types of qualified digital accessibility implementation expenditures include homepage design, responsive design, user experience (UX), conversion path building, page structure, metadata optimization, tag hierarchy, live chat support, alt text for images, overall messaging (copy and content), video transcribing file and media remediation are to name a few.
The following expenditures are considered eligible by the ADA:
- web accessibility solutions or tools that optimize websites
- hiring of sign language interpreters
- purchase of adaptive equipment
- production of accessible formatting on printed materials (braille, large print, audiotape, computer diskette)
- the removal of architectural barriers in facilities or vehicles
- fees for consulting services
What Other Stipulations Do You Need To Be Aware Of?
The disabled access credit can be applied annually, and there isn’t a limit to the amount of years you can claim the credit. However, expenditures made in previous years cannot be carried over to offset taxes owed in the current year.
You can carry the unused portion forward into the next year if the credit exceeds the amount of taxes you owe. This makes it easy to make your business more accessible without hurting your bottom line.
Can I Use The Disabled Access Credit For Seo Or Website Design?
The short answer is “yes”. The ADA Standards for Accessible Design set guidelines for businesses and public facilities to follow to make their services and products accessible to people with disabilities.
These guidelines are also excellent for search engine optimization (SEO). For example, the standards require businesses to provide audio and video text transcripts, making it easier for search engines to index and rank that content.
The standards also encourage businesses to use easy-to-use forms, shopping carts, and design responsive websites that load quickly, both of which are good practices for SEO.
Making your website ADA compliant comes with many great benefits, both for your company and the disabled community. Making your website & digital landscape ADA compliant is simply the right thing to do. Disabled people should not be excluded from accessing the internet simply because of their disabilities.
By making your site accessible to all, you’ll be helping to create a more inclusive world for everyone. From a business standpoint, becoming ADA compliant will help you to rank better on search engines, drive more traffic to your site, and stay ahead of your competitors.
You’ll also gain market share with an untapped audience of the 26% of the population that suffers from some disability that makes it difficult for them to view and use your website. For the disabled community, gaining access to your site will give them much-needed resources they may not have had before.
How To Apply For The Disabled Tax Credit
To claim the tax credit, businesses must file Form 8826, Disabled Access Credit, with their annual income tax return. For more information on eligibility requirements and how to claim the credit, please refer to the Tax Incentives for Improving Accessibility Fact Sheet.
Given the potential benefits of the credit, businesses must consult with their accountant and attorney to ensure that the company is eligible and take advantage of this opportunity.
What About The 190 Tax Deduction?
Check out IRS Publication 535 for more info on the tax deduction. Consult your accountant and attorney.
ADA Tax Deduction Vs. ADA Tax Credit – What’s The Difference?
It’s important to know the difference between a credit and a deduction. A deduction lowers your overall taxable income. A credit is a dollar-for-dollar reduction of your tax bill.
Can I Get Both A Tax Deduction And Tax Credit?
In some cases, businesses may also be eligible for an ADA tax deduction if their total ADA compliance expenditures exceed $10,250. For example, if a company has spent $18,500 on fixing ADA errors on their website, they can use both the disabled access credit and the tax deduction. The first $5,000 would be claimed as a tax credit, and any eligible expenses over $10,250 would qualify for the deduction.
You can carry forward any unused credit to the following year if the amount of ADA tax credits exceed a business’s total tax liability. This allows companies to claim the credit over several years until it is fully used.
Make Sure To Consult Your Accountant And Attorney
What Are The Next Steps Toward ADA Compliance?
Disabled Access Credit for website accessibility presents a significant advantage for companies and organizations. Any business that invests time, money, and resources in making its website available for public consumption gains an opportunity to create memorable interactions and long-term profitability.
This is an opportunity to improve your website’s accessibility and avoid discrimination lawsuits for non-ADA compliance or internet trolls.
Tag Marketing can help you take advantage of the tax credit by conducting a free site compliance audit and providing consulting, installation, and customization services to make your site ADA-compliant.
In addition to claiming the credit, having an ADA-compliant website will give you a competitive edge.
Make Your Website & Digital Marketing ADA Compliant – FREE Instant Audit
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