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With tax season just around the corner, there is some good news. Small businesses that are making an effort to improve accessibility are eligible for tax benefits. For those who have yet to join the accessibility revolution, these tax benefits might be the incentive you needed to get started.
A Helping Hand For Accessibility
Sometimes businesses need a little help to make their websites accessible. After all, when you’re running a business, digital accessibility may not be top of mind.
The reality is that most websites today are not very accessible, and people who have a disability may be unable to use your website without special accommodation. Either through manual coding, or the help of overlay solutions such as UserWay’s full AI-Powered Accessibility Solution, you can ensure everyone is able to use your website as intended.
But making websites accessible comes at a price, especially if you’re just getting started. Alternatively, your site may already be accessible but you’re looking to upgrade according to the latest Web Content Accessibility Guidelines (WCAG).
Regardless of where you are in your journey, the Disabled Access Credit can help get you there.
Disabled Access Credit Details
To claim these tax benefits, use IRS Form 8826, the Disabled Access Credit, and refer to Title 26, Internal Revenue Code, Section 44.
Tax credits are not tax deductions. They’re different. A deduction reduces taxable income and, therefore, the tax owed. Tax credits come later in the process — after tax has been calculated, a credit is subtracted outright from tax owed.
The Disabled Access Credit is limited to small businesses with gross receipts of one million USD or less or that employ 30 or fewer people. There is a maximum credit of $5000 per business, per year.
These are the terms for claiming the Disabled Access Credit: For expenditures of more than $250, you can take a 50% credit of up to $10,250.
Example 1: Your company spends $8,000 enhancing your website’s accessibility. Only expenditures in excess of $250 qualify, so subtract $250 from $8,000 to get $7,750.
You can claim 50% of that amount as a tax credit. In other words, you can subtract $3,875 from the tax owed on your next return.
Example 2: Your company spends $11,500 on an accessibility audit. You have exceeded the limit of $10,250. You can claim $10,000 of that. The 50% tax credit, then, comes out to $5,000.
Please be aware that the same expenditures cannot be capitalized, cannot be used in figuring a different credit, or any other example of “double-dipping”. Also please note that this is not a one-time credit. Although this can be used each tax year providing the eligibility requirements are satisfied.
The Disabled Access Credit applies only to federal taxes, not to state or local tax. There may be additional benefits at the state level. You should consult a licensed tax professional or perform additional research yourself to know more.
For more information, please see:
Fact Sheet, Tax Incentives for Improving Accessibility (PDF)
IRS Tax Credits and Deductions page on the Americans with Disabilities Act site (Website)
With UserWay’s AI-Powered Accessibility Solution, rest assured that your site is accessible for everyone.
Contact us today to learn more.