Tax Credits for Digital Accessibility: Everything You Need to Know
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The U.S. government offers tax credits to organizations to help make accessibility more affordable. Below, we’ll review the top digital accessibility tax credits available to organizations and who qualifies for them.
Over 1 billion people worldwide have a disability, and together with their friends and family, they have over $8 trillion in annual disposable income. Making your digital content accessible opens up a vast market for your business and a myriad of revenue opportunities. Plus, investing in digital accessibility can help you reduce the risk of digital accessibility-related lawsuits, increase customer satisfaction, and attract new customers.
Luckily, thanks to little-known tax credits, the cost of accessibility could be much more affordable than you expect. Below, we’ll delve into some of the top digital accessibility tax credits and how they can help you save on accessibility.
What Tax Incentives are Available for Digital Accessibility?
For most small businesses, tax credits for digital accessibility can unlock significant savings on their accessibility-related spending each year. Here’s an overview of the top tax incentives for digital accessibility:
Disabled Access Credit
The Disabled Access Credit encourages small businesses in the U.S. to comply with Title III of the ADA, which “prohibits discrimination on the basis of disability in places of public accommodation.” This includes brick-and-mortar businesses as well as online spaces.
Businesses that qualify can receive a tax credit for up to 50% of expenses up to $10,000 after the first $250, for a maximum credit of $5,000. For example, say a business spends $4,500 on digital accessibility costs. They can claim a tax credit of half of $4,250 for a total tax credit of $2,125.
Another example is a business that spends $11,000 to improve digital accessibility. It would qualify for the maximum $5,000 tax credit.
Title 26 of the Internal Revenue Code (Section 44)
Title 26 of the Internal Revenue Code (IRC), Section 44, pertains to the Disabled Access Credit. Put simply, it provides the legislative framework that allows small businesses to claim a tax credit for digital accessibility costs.
It also specifies which expenses qualify for the tax credit, such as removing physical or online accessibility barriers, installing technology, or other improvements that enhance accessibility. For example, the Architectural Barrier Removal Tax Deduction (IRC Section 190) allows qualifying businesses to deduct up to $15,000 per year for expenses related to removing physical, structural, or transportation barriers for those with disabilities. This may include adding keyboard navigation to your website’s navigation or redesigning the interface to be more compatible with assistive technologies.
Does Your Business Qualify for Digital Accessibility Tax Credits?
According to the IRS, only small businesses that earned $1 million or less in the last year and had no more than 30 full-time employees during that year qualify for digital accessibility tax credits.
If you don’t qualify, talk to your tax professional — they may have additional information on state-level programs that can help you enhance digital accessibility and save on costs.
How Much Could Your Business Save on Digital Accessibility?
If your business qualifies for these tax savings, you could be looking at significant cost savings.
Here’s an example: A company with revenues of $1,000,000 in a single tax year and 25 employees decides to enhance its customer-facing and internal websites. To achieve this, it signs up for a monthly subscription to a managed digital accessibility service — like AudioEye.
Say the subscription costs $8,000 per year. Companies must cover the first $250 of the expense before they can claim the tax credit. This means the most they can claim in this circumstance is $7,750. Remember, the tax credit covers half of all expenditures between $250 and $10,250, so your accountants can claim they’re eligible for a federal tax credit of up to $3,875.
This means your company could save almost 50% on the subscription's value, freeing up more resources for innovation and business development.
More importantly, making your website fully accessible enables you to reach the 26% of the U.S. population currently living with a disability and tap into a vast, vastly underserved market.
Save on Your Accessibility Investment with AudioEye
Improving the accessibility of your digital content brings myriad benefits — from expanding your customer base to tapping into new revenue streams. As you improve accessibility, talk to your financial advisor about Title 26 of the IRC and other digital accessibility tax credits. Doing so can help you save on digital accessibility initiatives and maximize your budget.
When you’re ready to take the following steps on your digital accessibility journey, there’s AudioEye. Our Accessibility Scanner is the perfect starting point, providing you with a high-level look into the accessibility of your existing content. AudioEye’s Automated Accessibility Platform then provides automated fixes for common accessibility issues, with more complex issues handled by our team of human experts. With our suite of accessibility tools, you can design and build digital experiences that are accessible to all users.
Get started with a free accessibility scan.
This blog post is for information only and is not designed to replace advice from legal or tax professionals. You should consult with your own tax advisor on your specific situation.
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