ADA Tax Credits For Business To Help People With Disabilities

Black woman in a wheechair in an office setting

All About ADA Tax Credits for Businesses That Help People with Disabilities

Did you know that the government gives special benefits to businesses that make their places easier for people with disabilities to use? These benefits are called tax credits, and they help businesses save money. It is also the law in the US that all Websites, Landing Pages, and Apps must be accessible to people with disabilities?

It is estimated that there will be over $15 Billion in penalties paid out over the next 12 months for for businesses and state and local government Websites that are not in compliance.

What is the ADA Tax Credit?

young blonde woman in a wheelchairThe government wants businesses to follow rules that make things fair for people with disabilities, known as the Americans with Disabilities Act (ADA). To encourage this, they offer a tax credit. A tax credit means that businesses can pay less in taxes. Each year, a business can save up to $5,000.

This tax credit is especially for costs that help make a business accessible. If a business spends money to help people with disabilities, they can get half of that money back through this tax credit, but only up to $5,000.

For example, if a business spends $490 on something that makes their website easier to use for people with disabilities, they first subtract $250 because the first $250 doesn’t count. They’re left with $240, and they can get half of that back, which is $120. So, they really only spend $370 for the year on that improvement.

Who Can Get This Tax Credit?

Businesses that either made $1,000,000 or less last year or have 30 or fewer full-time workers can apply for this tax credit.

How Do Businesses Apply for This Tax Credit?

To get the tax credit, businesses need to fill out a special form called Form 8826 and attach it to their yearly taxes. They can find this form and more information on the IRS website.

Sharing the Good News About Tax Credits

If you know someone who owns a business, you can tell them about this tax credit. It could save them a lot of money, especially if they are working to make their website easier for everyone to use. Here’s a simple way to tell them:

“Hi! Did you know by making your website easier for everyone to use, you might get back up to $5,000 each year from the government? Check out Form 8826 on the IRS website for more details. If you have questions, just ask!”

Andrew Anderson

PS This is not tax advice. This is for informational purposes only. That being said, have your Accountant or CIO contact us; we will gladly provide more materials on this.

You can also read more on the IRS Tax Credits and Deductions page on the Americans with Disabilities Act website.

IRS Tax Credits and Deductions

To assist businesses with complying with the ADA, Section 44 of the IRS Code allows a tax credit for small businesses and Section 190 of the IRS Code allows a tax deduction for all businesses.

The tax credit is available to businesses that have total revenues of $1,000,000 or less in the previous tax year or 30 or fewer full-time employees. This credit can cover 50% of the eligible access expenditures in a year up to $10,250 (maximum credit of $5000). The tax credit can be used to offset the cost of undertaking barrier removal and alterations to improve accessibility; providing accessible formats such as Braille, large print and audio tape; making available a sign language interpreter or a reader for customers or employees, and for purchasing certain adaptive equipment.

The tax deduction is available to all businesses with a maximum deduction of $15,000 per year. The tax deduction can be claimed for expenses incurred in barrier removal and alterations.

To learn more about the tax credit and tax deduction provisions:

Download IRS Form 8826 for the tax credit for small businesses

Go to the Internal Revenue Service Web Site

Department of Justice ADA Information Line.

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