Unlocking the ADA tax credit can provide significant financial benefits for your business. If you’re ADA-compliant, you may be eligible for this incentive. Learn how to determine if you qualify and calculate your potential claim.
As a business owner in the United States, taxes are likely one of your biggest expenses. The good news is that business owners can receive tax credits for making their websites accessible and compliant with the ADA.
In this article, you’ll learn about the ADA tax credit, how it works, and how much you can claim as tax relief. But first…
🔍 Run a free ADA website audit and find out if you are ADA-compliant!
What is the ADA Tax Credit?
The ADA (Americans with Disabilities Act) requires businesses and organizations to remove all barriers to people with disabilities in places of public accommodation. However, complying with ADA requirements and becoming fully accessible can be an expensive investment.
The ADA tax credit by the US Internal Revenue Service (IRS) is designed to help eligible small business owners cover accessibility-related expenses. To qualify for the ADA tax credit, your business must invest in enhancing accessibility for individuals with disabilities. This includes:
- Implementing AI technologies and conducting manual audits based on user feedback to improve website accessibility.
- Making audio content accessible through qualified professionals or alternative methods for those with hearing impairments.
- Providing supports like readable texts and audio recordings to assist individuals with visual impairments.
- Acquiring or modifying equipment to ensure it is usable by people with disabilities.
Pro Tip: You cannot claim more than $5,000 in tax credits per year!
ADA Tax Credit and Digital Accessibility
The ADA became law two decades before the birth of modern technology. However, several court rulings lend credence to the fact that it applies to the evolving digital space as well. Therefore, small business owners who invest in making their websites and web applications accessible may well be eligible to claim the disability tax credit IRS offers.
Several accessibility practices or implementations qualify as eligible access expenses, but some are more significant.
Who is Eligible to Claim the ADA Tax Credit?
As mentioned earlier, only ADA-compliant small businesses are eligible to claim the ADA tax credit or disability access credit. According to the IRS, the eligibility rules for the preceding tax year include:
- The business must have had gross receipts of $1 million or less.
- The business must have employed 30 or fewer full-time employees.
How to Calculate Your Claim
The ADA tax credit reduces the taxes you owe by up to $5,000 to cover accessibility improvements to your business.
Here’s a simplified guide to determine your eligibility and calculate your credit:
- You cannot claim a credit for the first $250 spent on accessibility.
- Total accessibility expenses for the year must not exceed $10,250.
- The maximum credit you can claim is $5,000.
Calculation Example:
Suppose you spent $379 for an ADA compliance solution and an additional $621 on accessible audits and reports, totaling $1,000 in accessibility expenses for the year.
- Total expenses: $379 + $621 = $1,000
- Subtract $250: $1,000 – $250 = $750
- Divide by two: $750 / 2 = $375
You can claim $375 as your ADA tax credit for the year.
How to Apply For ADA Tax Credit
Once you have confirmed that your business is eligible to claim the disability access credit, fill out the form on the IRS website to begin your application. Afterward, you attach it to your yearly tax return and send them to the tax office together. Always consult a tax professional when in doubt – this will save you a lot of time and trouble!
Conclusion
Claiming tax credits is achievable—simply follow the outlined steps, and you can secure them.
Equally AI offers top-tier web accessibility solutions that assist business owners in achieving ADA compliance. To kickstart your journey towards full accessibility, take advantage of our free ADA website audit tool. Check your website’s accessibility status today and ensure you’re not only meeting legal requirements but also enhancing user experience for all visitors.
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