Small firms that make accessibility improvements to their web presence are eligible for tax benefits.
The good news for small businesses that are either taking steps to improve accessibility for handicapped people or are considering taking steps soon is..
Tax benefits for small businesses that spend money on improving their accessibility are available.
You can recover some of these expenses if you've already made them as part of a small business.
These tax advantages may provide the motivation you need to begin your accessibility efforts if you haven't already, or they may be the key to persuading your company's decision-makers to take action.
Those who have not yet joined the Accessibility Revolution may find these tax incentives to be the push they need to begin.
When a small business installs a wheelchair ramp, offers print materials in Braille, or offers a sign language interpreter for an event, these expenses are incurred.However, websites, which can be extremely helpful for those with impairments, are also covered by the tax benefits.
The development of a barrier-free internet is essential, and encouraging companies to prioritize digital accessibility is a positive endeavor.
Most websites today are not accessible, and people with disabilities may be unable to use your website unless specific accommodations are made.
Either manually or with the assistance of overlay solutions such as our AI Powered Accessibility Product.
You can ensure that everyone can use your website as intended.
Tax Credit Information
Use IRS Form 8826, the Disabled Access Credit, and make reference to Title 26, Internal Revenue Code, Section 44 in order to claim these tax benefits.
Tax deductions and tax credits are two different things. A deduction lowers taxable income, which in turn lowers the tax due. Tax credit deductions are made directly from the amount of tax due after tax has been calculated.
Only small enterprises with annual gross receipts of $1 million or less and staff sizes of 30 or less are eligible for the Disabled Access Credit.
Of course, it isn't really easy because it has to do with taxes. However, It's not overly difficult.
The conditions for requesting the Disabled Access Credit are as follows:
You can claim a 50% credit for purchases over $250 up to $10,250, with a $5,000 maximum credit.
Example 1:
Your business invests $5,000 on improving the accessibility of your website or conducting an accessibility audit.
Only purchases above $250 qualify, so take $250 out of $5,000 to obtain $4,750. You can use a tax credit to offset 50% of that sum.
In other words, on your subsequent tax return, you can deduct $2,375 from the amount of tax due.
Example 2:
Your business spends $12,000 on an accessibility assessment or improving the accessibility of your website. You have spent more than the $10,250 cap.
Of that, you may claim $10,000. Therefore, the $5,000 tax credit equals 50% of the amount.
Also take note that you cannot "double dip" by capitalizing the same expenses twice or using them to determine two different credits.
But keep in mind that this credit is cumulative.
As long as the prerequisites are satisfied, it may be utilized each year.
Additional Info
Federal taxes are eligible for the Disabled Access Credit.
At the state level, there can potentially be further tax advantages.
Depending on the state where your company is headquartered, you should speak with a tax expert or do more study.
There is additional tax deduction for architectural improvements in addition to the Disabled Access Credit.
This deduction is only applicable to actual business locations; it does not apply to websites.
It can be smart to speak with a tax expert before making these purchases so that you can make the appropriate plans.
External Links:
- IRS Tax Credits and Deductions page on the Americans with Disabilities Act Website
- Fact Sheet, Tax Incentives for Improving Accessibility PDF
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Please be aware that MattSEO is not liable for any updated or incorrect tax information.
This content is intended to be educational and is not meant to take the place of guidance from a tax or accounting professional.
Always consult a specialist.