Become Accessible to Get the Disabled Access Tax Credit

Background

Since its inception, America has been fascinated with the idea of a just society where freedom, equality, and justice reign supreme. The government of the United States was set up to ensure these things, as can be seen in the language of the Declaration of Independence, the Constitution, the Federalist and Antifederalist Papers, and other founding documents. In the modern era, the emphasis has been placed on the ideas of diversity and inclusion. Thanks to the fifties and sixties, diversity has been celebrated more and more, and members of racial minority groups have been protected and encouraged to flourish.

In the early years of the twenty-first century there was some institutional movement towards inclusion – making sure people with disabilities weren’t marginalized or that they didn’t face discrimination. This movement never got the same level of media attention, nor captured the public’s indignation as much as the racial-justice movement. This may be because the discrimination wasn’t as intense or as pointed. Nobody said, “We don’t want disabled people eating in the same restaurants as the rest of us, or using the same restrooms.” There wasn’t discrimination based upon a label, like there was with racism.

Nevertheless, when restaurants or public spaces with restrooms failed to build in the physical accommodations for people in wheelchairs, for example, the effect was the same as if people with a mobility disability had been ideologically barred from the premises. Though the effect of the discriminating ablism was the same, it may not have ever become conscious in the minds of the people who were thus discriminating.

The ADA was passed in 1990, and in the early 2000s there was a movement to apply the ADA to online spaces. This has been de facto since then, though it was only officially affirmed by the Department of Justice this past March.

To be fair, the DOJ did join a few lawsuits starting in 2010 for a few years, but it has since phased out its direct involvement in cases, probably largely because its involvement hasn’t been needed. Since 2013 the number of cases brought by individuals and plaintiff law firms has risen significantly almost every year. Though the government’s direct pressure on companies has thus decreased, the pressure in the form of the threat of litigation has increased.

Impetus for Change

Individual and class-action lawsuits may now be the largest and most visible motive force encouraging website accessibility, but they’re far from the only influence. Back in 1999 the World Wide Web Consortium (W3C), released their first version of the Web Content Accessibility Guidelines (WCAG). The W3C is a cooperative group of international partners dedicated to setting standards for the World Wide Web.

The WC3 released the WCAG in order to establish standard practices for website creators to make sure that their websites are accessible to as many people, with whatever disabilities, as possible. The WCAG sets clear standards, and is recognized almost universally as the most complete guidelines, to date, for making websites accessible.

The guidelines help, but so does much of the advocacy done for the disabled community, such as the establishment and promotion of Global Accessibility Awareness Day (https://accessibility.day/) on the third Thursday of May. And although the DOJ no longer joins in prosecuting lawsuits against companies with websites that discriminate against the disabled, that’s not to say that the US government has stepped out of the arena.

The threat of litigation may provide the biggest stick to encourage website accessibility, but the government has also provided a carrot for businesses to become accessible. The IRS has form 8826 which can be submitted by businesses to decrease their tax burden if they pay to make their businesses accessible to all.

For businesses with a physical location, this can be used to offset the cost of their efforts to retrofit their facilities with such things as ramps or door openers. For businesses with an online presence, this credit can be used to offset the cost of captioning videos, adding alternative text to images, and making sure that in everything else the site is easy to access by those with disabilities.

How the Tax Credit Works

Who Qualifies

The Disabled Access tax credit is part of the General Business Credit, which has a host of other credits to help businesses out with a variety of expenses. The Disabled Access Credit is available to small businesses, which it defines as businesses with an annual income of less than $1 million, or 30 employees or fewer.

What Qualifies

Any money spent in making the site accessible counts as an expenditure for the purpose of making the site accessible to the disabled. This could be money spent on a review of the site for accessibility issues and prioritizing them, fixing the semantics of the site to make it easier for users of assistive technologies to understand, adding captions to videos for the deaf or alternative text to images for the blind, or any of the thousands of other things that might need to be done to make your site fully accessible. The more deeply you have the site reviewed, the more things you’ll likely find that need to be fixed, and any money spent on reviewing or fixing can be claimed.

Amount

The Disabled Access Credit provides coverage of 50% of your accessibility-related expenses, with a value of up to $5000 per year. This doesn’t include the first $250 you spend each year, but does include everything else.

In other words, to claim the entire available credit, you would spend $10,250 per year. If you spend more than $10,250 in a year, you can claim the rest as a deduction, and since you can’t double dip, so we recommend you claim the disabled access tax credit first.

Process

The first step to claiming your Disabled Access Credit is spending the money to make your site accessible. Contact your web development agency if they specialize in web accessibility, and ask them to do a full accessibility review of your site with a prioritized list of issues needing to be fixed. Have them fix at least the most critical issues, and then pay for the work. Record how much you spend on IRS form 8826 line 1, and perform the simple calculations on the form to figure out what your credit is.

Next you’ll also have to add this information to your form 3800 (the General Business Credit) part III, line 1e, and submit this with your taxes. This will reduce the total amount of taxes you owe by 50% of the amount you spend to make your site accessible, less the first $250. Since you now get to keep some of the money you would have been paying on taxes, you’ll be able to immediately use that amount or more to continue the remediations of your site to make it even more accessible.

Examples

1. You pay a web development firm $3000 for a basic audit of your site. They find ten issues that will take six hours of work, or $1250 to resolve. You pay them to resolve those issues. Your site is basically compliant so you don’t get sued that year. The next year you submit form 8826 and thus get to pay $2000 less on taxes than you would have had to.
2. You pay a web development firm $4000 for a deeper audit. They find twenty issues that will take sixteen hours of work, or $3250, to resolve. You pay them to resolve those issues. Your site is mostly compliant so you don’t get sued that year. The next year you submit form 8826 and thus get to pay $3500 less on taxes than you would have had to.
3. You pay a web development firm $8000 for a comprehensive audit of your website. They find fifty issues that will take forty-one hours of work, or $8000, to resolve. You make a plan with them to resolve the twenty most critical issues throughout the rest of this year. It takes eleven hours, or $2250, to work through those. You plan for them to fix the other thirty issues next year. At the end of the year, you submit form 8826 and thus get to pay $5000 less on taxes than you’d have had to. You use some of this to pay for your web development firm to fix the rest of the issues and re audit your site to make sure there’s nothing new.
4. You sign up for an accessibility package with SeaMonster Studios that includes continual monitoring of your site for accessibility issues as well as a certain amount of discounted work to achieve accessibility throughout the year. Paying a set amount all at once or on a schedule makes filling out form 8826 even easier, and simplifies record keeping in case of an IRS audit. Additionally, at the end of the year we send you a prototype of form 8860 with all of your information included so you can easily submit it for your credit. Working with us also ensures continual progress on your site towards full accessibility compliance, which puts you in better stead in the event of a lawsuit over accessibility concerns. In fact, the progress itself makes your site much less attractive to the lawyers bringing the suits, making it less likely you’ll get one in the first place.

Wrapping Up

We at SeaMonster Studios think the best move for almost anyone reading this would be to take advantage of one of our accessibility packages. Let’s put together a plan to see that your site is on track to achieve full compliance. Along the way, we’ll help you make sure that you receive as much credit for what you’re doing as you can by taking full advantage of the Disabled Access Credit.