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How to get money from the IRS for making your website accessible

Over the last few years, website accessibility has become a crucial aspect of business operations. It ensures inclusivity and equal access for all users, opens up new market opportunities, and protects you from ADA-related lawsuits.

Additionally, there’s a financial perk for businesses striving to make their websites accessible – the Accessibility Tax Credit.

What is the Accessibility Tax Credit?

Under Section 44 of the IRS Code, the Accessibility Tax Credit is designed to support small businesses in their efforts to make their services, including online platforms, accessible to individuals with disabilities.

It’s important to note that this is a ‘tax credit’ and not a ‘tax deduction.’ See below for an explanation of the difference.

What is the difference
between a tax credit & a tax deduction?

What's the difference between a tax deduction and a tax refund?

What is a tax credit?

A tax credit for a business is a direct reduction of its tax liability. It’s like getting a dollar-for-dollar discount on the final tax bill.

Impact: If your business has a tax credit of $1,000, it directly reduces your tax bill by that amount. So if you owed $5,000 in taxes, and had a $1,000 tax credit, this would bring your tax bill down to $4,000.

Types: Credits can be either refundable or non-refundable. A refundable tax credit could result in a refund if it reduces the tax liability below zero. For example, if you had a tax bill of $1,000 and a refundable tax credit of $3,000, you would get $2,000 refunded to you. A non-refundable credit can only reduce the tax bill to zero but not create a refund.

What is a tax deduction?

A tax deduction for a business lowers its taxable income. The value is based on the business’s tax bracket.

Impact: Deductions reduce the amount of a business’s income subject to tax. For example, if your business is in the 25% tax bracket and has a $10,000 deduction, it saves $2,500 in tax (25% of $10,000). The savings depend on the business’s tax bracket.

Types: For businesses, deductions can include various operating expenses, capital expenditures, and other business-related costs. These reduce the overall taxable income of the business.

This credit is a boon, especially when considering the costs associated with adapting websites to meet accessibility standards like the WCAG (Web Content Accessibility Guidelines).

Eligibility for the Credit

Businesses qualify for this credit if they:

  • Have annual gross receipts of $1 million or less, or
  • Employ no more than 30 full-time employees.

This criterion ensures that the credit supports small businesses that might otherwise struggle with the financial implications of enhancing accessibility.

Covered Expenses

For website accessibility, eligible expenses can include:

  • Development of accessible website features compliant with WCAG guidelines.
  • Costs associated with accessibility audits and consulting services.
  • Implementing assistive technologies like screen readers or alternative keyboard inputs.
  • Adaptations for mobile responsiveness to ensure accessibility across devices.

Physical modifications and services for overall business accessibility are also covered under this credit. This includes things like adding access ramps to buildings, providing accessible formats of information (such as Braille, large print, and audio materials), and acquiring or modifying equipment for accessibility.

The tax credit covers 50% of eligible accessibility expenditures, excluding the first $250 spent and up to a maximum expense of $10,250, offering significant financial relief.

This means the maximum refund is $5,000 per business.

How to Claim the Credit

Businesses can claim this tax credit by filing IRS Form 8826 with their tax return. Professional advice from a tax expert is recommended to ensure the credit is appropriately claimed.

Is your website accessible?

Investing in website accessibility is not just a moral and legal imperative; it’s also a smart business strategy, further sweetened by the Accessibility Tax Credit.

By embracing website accessibility, businesses open their digital doors to a wider audience, foster inclusivity, and enjoy financial benefits, all while building a positive brand image.

Is your website accessible? Artist Dynamix offers a service to add accessibility to websites. We’ll do an audit of your site and then set up a plugin that make sure your website is compatible with the Americans With Disabilities Act (ADA) and other accessibility guidelines.

Disclaimer: This blog post is for informational purposes only and is not intended to provide financial advice. The information contained in this post is not intended to be a substitute for professional financial advice. Always seek the guidance of a qualified professional with any questions you may have regarding financial decisions or tax-related matters. The author and the publisher of this blog are not responsible for any actions taken as a result of reading this post.