In 1990, under the administration of President George H.W. Bush, the Americans with Disabilities Act (ADA) was enacted to prohibit discrimination against individuals with disabilities. As an extension of this act, a tax credit for web accessibility expenditures was introduced to incentivize businesses to enhance their websites. This initiative aims to make web and telecommunication services more intuitive and accessible, providing individuals with hearing, speech, and vision disabilities equal opportunities to utilize these services.
Businesses that incur expenses to enhance their website content, structure, and accessibility solutions for disabled users may be eligible for the Section 44 ADA tax credit. To qualify for this credit, businesses must meet specific criteria: they must have generated $1,000,000 or less in revenue in the preceding tax year or have fewer than 30 full-time employees. The tax credit covers 50% of eligible expenditures incurred in the tax year, up to a maximum expenditure limit of $10,250. However, the first $250 of these expenditures are not eligible for the credit. As a result, the maximum credit a business can receive is $5,000.
In April 2024, the Department of Justice announced that websites owned and operated by government entities, non-profits, corporations, and small businesses must be accessible to all users. Businesses that fail to make their web pages accessible are at risk of potential lawsuits for non-compliance and excluding disabled users. Past lawsuits have heavily favored accessibility requirements.
We highly recommend reaching out to your web designer to ensure compliance. Please reach out to us for additional information on the Section 44 ADA tax credit.
Haley Melanson is a Audit & Tax Senior at Katz, Nannis + Solomon, P.C. If you have any questions or would like to speak with one of our tax professionals, please contact our office at 781-453-8700.