Plaintiff’s attorneys have increasingly sued companies that claim their websites violate the Americans with Disabilities Act (ADA), the California Unrest Civil Rights Act, and similar state laws that prohibit discrimination against people with disabilities. The justification for these lawsuits is that they are unlawfully discriminating against companies with websites that do not allow people with disabilities to use and enjoy the website. While the legislation in this area is still unclear (e.g. there is disagreement about the “Accessibility Standard” and which companies may be required to have accessible websites), judges are increasingly enforcing anti-discrimination laws against companies that do not have accessible websites. The cost of non-compliance can be enormous and cost companies exponentially more than if the company had just made their website accessible.
Uncle Sam has now stepped into the battle helping small businesses that want to invest in updating or maintaining their websites to be more accessible to people with disabilities. In particular, the IRS is offering a one-time tax credit of up to $ 5,000 for small businesses incurring expenses related to improving the accessibility of their website. The incurred website spend must be between $ 250 and $ 10,250 and only 50% of the cost is eligible for credit (with a maximum credit of $ 5,000). To claim the credit, businesses must use the Disabled Access Credit (IRS) Form 8826 and submit the form with their tax return. Only companies with less than $ 1 million in gross sales or fewer than 30 full-time employees in the previous tax year are eligible for the credit. Your accountant or tax advisor can further help determine if your company is eligible for credit.
The bottom line is that this relatively little-known tax break is a win-win-win situation. It helps tech companies sell website accessibility solutions more easily, helps their small businesses get the same services at an essentially substantial discount (via a tax credit) while reducing the risk of future litigation, and helps disabled people better on the internet.
Jon L. Farnsworth is a partner at Spencer Fane based in the firm’s Minneapolis office. He can be reached at [email protected]