There are lots of great reasons to make your website ADA Compliant. Not only do you know that people with disabilities need to be able to access the world like everyone else can, but also that you don’t want to get sued because your site is not ADA compliant. That’s two very good reasons. So what’s stopping you? And would a tax credit for website ADA compliance costs or a tax deduction for website ADA compliance costs help make your decision a bit easier?
Note: The information on this page is informational and not to be considered tax advice. For tax information regarding your particular situation, please consult your tax professional.
Three Reasons Not To Make Your Website ADA Compliant
When we speak with business owners, executives and managers about ADA compliance for their websites, we hear a variety of reasons why they might not want to make their sites ADA compliant. Despite knowing that there are thousands of website ADA lawsuits every year, and that there are nearly 100,000 threats of ADA lawsuits that result in out of court settlements worth tens or hundreds of thousands of dollars, some companies still decide not to move forward. Usually, it’s one or more of these three reasons.
They don’t believe ADA Compliance for Websites is required. Well, ADA compliance for websites is definitely required for businesses of all sizes, and the Department of Justice confirmed that in 2018.
They choose to be risky. With the millions of websites that are non-compliant, they choose to play the odds, and take the risk that someone else will get sued instead of them…even though they spent thousands or millions to be ADA compliant in their buildings to eliminate similar ADA Compliance risks.
They don’t want to spend the money. This is the most common reason, and paired with the other two, it’s sometimes a powerful clincher to the decision.
So how much does it cost to make your website ADA compliant? Making a website ADA compliant the usual way is a meticulous, detail-oriented and highly technical task, and can cost many thousands of dollars, even for a very small website. Sometimes, it can cost as much as the initial website development. And other times, a site cannot be made compliant at all and needs to be totally rebuilt at a cost that can be more than double the original website. (Note, our method uses Artificial Intelligence at its core and generally costs a fraction of other methods. Still, it’s sometimes more than a business wants to invest.)
Whatever the cost, the Federal Government is willing to pay as much as half the cost…maybe even more.
Get Your Tax Credit For Website ADA Compliance Costs
The Americans with Disabilities Act actually altered the Tax Code. According to the ADA website, “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.”
Businesses with $1,000,000 total revenue or less in the prior tax year, or 30 or fewer full-time employees are eligible for a Tax Credit for Website ADA Compliance Costs that can cover up to 50% of up to $10,000 in qualified expenses. In other words, if the cost of remediating your website is over $10,000 (see details below), you may be eligible to receive a tax credit for your business of up to $5,000.
To apply for the tax credit for website ADA compliance, consult your Tax Advisor. He or she will direct you to IRS Form 8826, the “Disabled Access Credit” form, which you will attach to your tax return. Among tax forms, this is one may be the simplest tax form ever created by the IRS.
It requires you fill in just eight numbers, and the IRS has already filled in two of them for you. You enter your total costs to comply with the ADA. According to the Form 8826 instructions, “For purposes of the credit, these expenditures are amounts paid or incurred by the eligible small business to comply with applicable requirements under the Americans With Disabilities Act of 1990 (Public Law 101-336) as in effect on November 5, 1990.”
The first $250 of your expenses are not included in the calculation, and the maximum allowable expenses you can claim are $10,000. Those are two of the numbers the IRS has placed on the form already. So whatever you spend beyond $250, up to $10,000, gets multiplied by 50%, and that is your tax credit for website ADA compliance, up to a maximum of $5,000. (Please consult your tax professional for your specific situation.)
Tax Deduction for Website ADA Compliance Costs
Not only might you be eligible for a Tax Credit, but your business might also be eligible for a Tax Deduction for website ADA compliance, too. According to the IRS, the ADA tax deduction is available to all businesses with a maximum deduction of $15,000 per year. So even if you don’t qualify for the tax credit, you may still qualify for the tax deduction.
And according to this ADA Tax Incentive Publication, the Tax Deduction and Tax Credit can be used together if your total eligible ADA compliance expenses exceed $10,250. For example, if you spent more than $10,250 on your website ADA compliance expenses (which gives you a $5,000 tax credit), then any eligible expenses over that $10,250 would be eligible for the tax deduction for website ADA compliance. (Please consult your tax professional for your specific situation.)