Disabled Access Credit: An ADA Compliant Website Tax Credit for Small Businesses

What is the Disabled Access Credit?

The Disabled Access Credit, also sometimes colloquially referred to as the ADA Tax Credit, is a tax benefit that helps business owners cover the costs of making their businesses more accessible to people with disabilities. This credit is available for small businesses that have expenses related to complying with the Americans with Disabilities Act (ADA). Businesses can claim this credit each year they make such expenditures, making it a recurring benefit for those committed to improving accessibility.

Who is Eligible for the Disabled Access Credit, a.k.a the ADA Tax Credit?

The Disabled Access Credit is specifically aimed at businesses with $1 million or less in revenue or with 30 or fewer full-time employees. Business owners can claim up to $5,000 per year through this credit, making it a valuable financial incentive for small businesses in particular to create inclusive and welcoming spaces for everyone.

What Qualifies for the ADA Tax Credit?

The IRS most broadly defines eligible access expenditures as those that “remove barriers that prevent a business from being accessible to or usable by individuals with disabilities.” Eligible examples of businesses using the Disabled Access Credit could include expenses related to installing ramps, widening doorways, or adding accessible bathrooms, seating, and parking spaces.

Additionally, businesses can use this tax credit to help fund the remediation or development of ADA compliant websites in order to target digital accessibility for all users. This tax credit encourages businesses to create inclusive environments and enhance accessibility across not only physical spaces, but digital ones as well.

ADA Compliant Website Requirements

Any web accessibility work done in a given year may qualify businesses for the Disabled Access Credit assuming this work was done with the intention to target ADA compliant website requirements. ADA compliant websites are designed to provide greater access and usability for individuals with disabilities. These requirements are essential for businesses and organizations aiming to provide inclusive online experiences. Key components of ADA compliant websites include:

1. Accessible Design: Websites should be designed with accessibility in mind, incorporating features such as alternative text for images, keyboard navigation, and scalable fonts to accommodate users with visual or motor impairments.

2. Screen Reader Compatibility: Websites should be compatible with screen reader software used by individuals with visual impairments. This includes providing text alternatives for non-text content, proper heading structure, and logical reading order.

3. Color Contrast: Make sure there is enough contrast between text and background colors to enhance legibility for users with low vision or color vision deficiencies.

4. Accessible Forms: Forms on the website should be easy to navigate and complete for users with disabilities. This includes providing clear labels, error notifications, and instructions for completing the form.

5. Multimedia Accessibility: Videos and audio content should be captioned or transcribed to make them accessible to users who are deaf or hard of hearing. Additionally, provide controls for users to adjust volume or playback speed.

6. Navigation and Structure: Websites should have a clear and consistent navigation structure, with descriptive link text and hierarchical organization to aid users in finding and navigating content easily.

7. Responsive Design: Ensure that the website is responsive and accessible on various devices, including desktop computers, tablets, and smartphones, to accommodate users with different browsing preferences.

8. Compliance Standards: Follow established accessibility standards such as the Web Content Accessibility Guidelines (WCAG) to ensure compliance with ADA requirements. WCAG outlines specific criteria for website accessibility, including perceivable, operable, understandable, and robust principles.

By taking steps such as these to comply with ADA compliant website requirements, businesses can help to create a more inclusive online environment, reduce litigation risk, and also have the opportunity to be reimbursed for their efforts via the Disabled Access Credit.

How is the Disabled Access Credit Calculated?

The Disabled Access credit is calculated based on qualified access expenditures incurred during the tax year. The credit is equal to 50% of eligible accessibility expenditures, from a minimum of $250 up to a maximum of $5,000 per year. Any businesses with yearly expenditures exceeding $10,000 will still only be eligible for a credit of $5,000 per year.

For example, if a business spends $10,000 on a new website built to meet ADA and WCAG standards in a tax year, they can claim a credit of $5,000, which is 50% of their expenditures up to the maximum limit. It’s essential for businesses to keep accurate records of their expenses and consult with a tax professional to ensure they meet all eligibility criteria and correctly calculate the credit amount when filing their tax return.

How to Claim the Disabled Access Credit

In order to claim the Disabled Access Credit, qualifying businesses need to complete IRS Form 8826 and include it with their annual tax return, detailing the qualified access expenditures they have made during the tax year. These expenses should be documented with receipts and invoices as proof of payment. However, in order to claim this credit, businesses must also not have received reimbursement for the expenses through insurance or other means.

Once Form 8826 is completed, it should be included with the business’s annual tax return when filing with the IRS. It’s also important for businesses to keep thorough records of all accessibility-related expenses and to accurately complete Form 8826 in order to best position themselves to receive this tax credit.

It’s important to note that tax laws and regulations can be complex and subject to change. Therefore, before attempting to claim the Disabled Access Credit or any tax credit, businesses should consult with a qualified accountant or tax professional. They can provide personalized advice and guidance based on the specific circumstances of the business, ensuring compliance with all relevant tax laws and maximizing the benefits of available tax credits.

Conclusion

Our team takes great pride in helping businesses improve their website’s accessibility through website remediations and ADA compliant website builds. Our web accessibility services can significantly improve the usability, reach, and legal compliance of businesses’ websites. With four WAS-certified developers and our remaining developers in the process of obtaining their WAS Certifications, our development team can assess and address accessibility issues on existing websites, or build new accessible websites from scratch. Since web accessibility is ongoing and must be maintained over time, we are here to help every step of the way.

As mentioned previously, to see if your business has eligible expenditures for the Disabled Access Credit, or any other tax credit mentioned in this blog post, we recommend readers consult with a qualified tax advisor or accountant. While we always strive to provide accurate and helpful information, please note that we are not tax professionals. Tax laws and regulations can be complex and may vary based on individual circumstances. Consulting with a professional ensures that businesses receive personalized advice tailored to their specific situation, ensuring compliance with tax laws and maximizing available benefits.