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There are a number of ways in which businesses may spend money on accessibility. One of the most common is the construction of wheelchair ramps. Other methods include the installation of automatic doors and the addition of accessible parking spaces.
The Americans with Disabilities Act (ADA) states that all businesses make sure they are, in fact, accessible to people with disabilities. This includes making the appropriate changes to their facilities and practices so that they can be used by those who need them.
Tax benefits for accessibility are intended to assist businesses with expenses related to their efforts to be ADA-compliant. The good news is that these benefits for making adjustments for accessibility also apply to websites.
So, if you’ve already spent extra money in making your website or other online resources accessible, you may be able to recover part of your expenditures. If you haven’t already begun working on accessibility, these tax breaks might motivate you or your company’s decision-makers to take action.
Website accessibility is the process of making a website usable for people with disabilities.
Visual or hearing impairments are two common types of disabilities affecting website users. Websites that are accessible for users with these disabilities will have features such as:
Many websites do not include appropriate accessibility features. Navigating these websites can be challenging for users who are blind, deaf, or unable to operate a mouse, among other things.
Enhancing a website’s accessibility incurs expenses, especially when modifying an existing site. Constructing a new site with accessibility in mind from the beginning also adds costs to the project. With this in mind, the same tax advantages that apply to accommodations such as wheelchair ramps apply to websites and may assist site owners with the extra expenditures.
When you are a business owner, it’s important to know what tax credits your company is eligible for. Here is a summary of the ADA tax credit details with examples:
The Disabled Access Credit is available to businesses with gross sales of up to $1 million and 30 or fewer employees. For expenses greater than $250, you may claim a 50% credit up to $10,250 for a total credit of $5,000.
For example, if your organization spends $4,000 on improving the accessibility of your website, all expenses incurred over $250 are eligible. You’ll deduct $250 from $4,000 for an amount of $3,750. You may receive a tax credit for half of that amount, which is $1,875.
On the other hand, if your business spends $13,000 on improving the accessibility of your website, you have surpassed the $10,000 limit. However, you are still entitled to $10,000, so a 50% tax credit amounts to $5,000.
Some points to keep in mind are that the same expenses cannot be amortized, used to calculate a separate credit, or used in any other way to avoid over-compensation. However, you should be aware that this is not a one-time credit. It is valid for one year as long as the qualifying conditions are satisfied.
The Disabled Access Credit applies to federal taxes, while additional tax breaks may also be available at the state level. You may consult a tax professional to learn the specific requirements for your state.
Use IRS Form 8826, the Disabled Access Credit, and refer to Title 26, Internal Revenue Code, Section 44 to claim these tax advantages.
At DCM, we understand that developing an ADA-compliant website is a great motivator in itself. Not only do you avoid liabilities and ensure that the experience of accessing your website is as easy as possible for all users, including those with disabilities, but now we see that tax benefits are also available for taking steps toward compliance. We are here to help you receive these all-around advantages.
Contact us today to find out more about our available solutions to help clients create and maintain accessible websites.