As a practice, you are always looking for ways to reduce costs and better serve your patients. Did you know that by making your website more accessible you could be eligible for up to a $5,000 tax credit? If you are a small practice with less than 30 employees, through the IRS Code Section 44 Disabled Access Credit, your practice can qualify for a tax credit for improving your website’s accessibility. The policy states “small businesses may take an annual tax credit for making their businesses accessible to persons with disabilities”.
Over the years at Practis, we have voiced all the important reasons to take your website’s accessibility seriously – improved performance in search engines, reduced risk of lawsuits, access by users of all types to the information they need to learn about you, your services and how you help. Still many practices find it difficult to budget for this critical component of their digital strategy. Because redesigning a website or performing ongoing testing or remediation can be cost-prohibitive to practices with smaller budgets, to incentivize small businesses, the IRS is offering a tax credit of up to $5,000 each year to offset 50% of your accessibility-related expenses.
The most cost-effective way to incorporate accessibility into your website is to make sure that the site is built to be accessible in the first place. But when that doesn’t happen, we strongly recommend budgeting for an audit program. Why? Even when a site is built to be WCAG 2.1 compliant, there are issues that pop up when new content is added and the site code is tweaked.
About the Disabled Access Tax Credit
The Americans with Disabilities Act, or ADA, is long known for requiring businesses to ensure that their facilities are accessible to people with disabilities. Since 2017, the Department of Justice and federal courts expanded that to include websites and mobile apps. As of January 2018, under Section 1557 of the Affordable Care Act, all healthcare providers who receive funds from the federal government are now mandated to comply with WCAG 2.1 AA standards for their digital properties.
This tax incentive, which is meant to subsidize accessibility initiatives, also now applies to digital accessibility efforts. This includes, but is not limited to, the following:
- Updating your website or mobile app to comply with WCAG 2.1 AA standards
- Captioning videos
- Enabling stop, pause on automatic content
- Adding meaningful descriptions to images for screen readers (alt tags)
- Producing transcripts of recorded audio
- Ensuring your website is free from coding errors
- Consulting services to accomplish the above.
Website accessibility initiatives easily meet these criteria when they remove errors in the code that make a practice’s website inaccessible by a patient with a disability.
Who Qualifies for the Disabled Access Tax Credit?
To be eligible for this tax credit, your practice qualifies if either of these two conditions is met:
- annual revenues of less than $1 million
- fewer than 30 full-time employees (defined as employees working 30 hours per week for at least 20 weeks out of the year)
Practis does recommend that you consult with a qualified tax professional to confirm your specific eligibility.
How Does the Tax Credit Work?
To restate, the IRS allows you to claim a 50% tax credit against your accessibility spending. For example, you hire an agency to audit and remediate your site, for which you are charged $8,000. The credit does not start until you have spent a minimum of $250. Your credit should be calculated against $7,750. So your 50% tax credit would be $3,875. Keep in mind that the maximum credit you can claim is $5,000. If you spend less than $10,250, your total tax credit will be less than $5,000. Above that amount, your tax credit will never exceed $5,000. Of course, be sure to check with your tax advisor.
How to Apply?
You can apply for the Disability Access Tax Credit on your business tax return by completing IRS Form 8826.
Interested in Updating or Better Managing Your Site’s Compliance With WCAG 2.1?
This tax year, if you haven’t yet considered making your web presence more accessible, it may be time to do so. Please reach out to Practis to learn more about ways we can help.
The content offered in this blog should not be substituted for tax advice. Please consult your own tax professional to address your specific situation.