Ran Ronen, Founder and CEO of Equally AI, simplifying web accessibility to ensure compliance with ADA, EAA and WCAG standards.
Many small businesses still view web accessibility as a compliance burden—something to quietly handle after receiving a lawsuit or complaint notice. But what’s often overlooked is the powerful financial incentive: Under the IRS’s Disabled Access Credit (also known as the ADA Tax Credit), eligible small businesses can claim thousands annually for accessibility improvements spanning both physical spaces and digital platforms (websites, apps) under the ADA’s Title III. Yet most companies never take advantage of it.
Many leaders don’t realize their digital accessibility work even qualifies, and fewer still document it in ways that meet IRS criteria. As a result, businesses often absorb the full cost out of pocket while missing a legitimate way to offset it.
To address that gap, let’s take a look at how the ADA Tax Credit can be a strategic investment that, when done right, pays for itself.
What is the ADA Tax Credit?
The ADA Tax Credit is a U.S. federal incentive designed to help small businesses offset the cost of accessibility improvements. Unlike a deduction (which only reduces taxable income), a tax credit directly lowers your tax bill dollar for dollar. If eligible, businesses can recover 50% of qualifying accessibility expenditures each year, up to a maximum credit of $5,000 (the IRS allows total eligible access expenditures of up to $10,250, with 50% applied after the first $250).
Eligibility
The credit is limited to small businesses. To qualify, a company must either earn $1 million or less in gross receipts for the previous tax year, or employ 30 or fewer full-time workers (defined as those working at least 30 hours per week for 20 or more weeks annually). In practice, most small firms, startups and local service businesses meet these criteria. Larger organizations that exceed these thresholds cannot claim this credit but may still qualify for the Barrier Removal Tax Deduction.
Credit Amount
Again, the credit covers 50% of eligible expenses exceeding $250, up to $10,250 in total spending. So, for example, if you spend $8,000 on accessibility improvements, you subtract the first $250, then take 50% of the remaining $7,750, which gives you a tax credit of $3,875.
One important caveat I must mention here is that the ADA tax credit is nonrefundable. However, if the credit exceeds the business’s tax liability, any unused portion can be carried forward for up to 20 years. For example, if your business qualifies for a $5,000 credit but only has a tax liability of $3,000, the remaining $2,000 is available to offset taxes in the next year. Since it can be claimed annually, the ADA tax credit becomes a recurring incentive for organizations that continue investing in accessibility year after year.
What accessibility expenses qualify for the ADA Tax Credit?
The IRS defines “eligible access expenditures” as reasonable and necessary costs that remove architectural or communication barriers for people with disabilities. When the Disabled Tax Credit was created in 1990, those barriers referred mainly to physical access (ramps, signage and restrooms). But communication access has since evolved to include digital interfaces through which businesses serve customers and employees.
Furthermore, the Department of Justice (DOJ) has consistently affirmed through official guidance and significant legal settlements that the ADA extends to digital environments, establishing that web accessibility work can qualify for the tax credit if it is properly documented and tied directly to ADA compliance efforts.
Such digital accessibility costs may include:
• Expenses incurred to audit, design or remediate websites and mobile apps to meet recognized accessibility standards such as WCAG 2.1 Level AA
• Purchasing or licensing assistive technology for employees or customers, e.g., screen-reader software, accessibility assistants or adaptive keyboards
• Paying for services to improve multimedia access, e.g., captioning videos, adding transcripts or providing audio descriptions for visual content
• Converting digital documents into accessible formats, including tagged PDFs, Braille, large-print or audio versions
• Accessibility consulting and training fees paid to specialists who audit digital properties, train staff or guide ADA compliance strategy
• Providing sign-language interpreters, real-time captioning or accessible chat support for online events or customer interactions
To qualify, these expenses must be reasonable, necessary and clearly documented as part of your ADA compliance plan, showing that they directly remove or prevent digital barriers.
Strategic Next Steps For Business Leaders
Understanding the ADA tax credit is one thing, but strategically leveraging it is another. Here’s how forward-thinking leaders can turn accessibility investments into measurable ROI:
1. Make accessibility a budget priority.
Don’t bury accessibility under “miscellaneous.” Rather, build it into your annual budgets the same way you allocate for cybersecurity, data privacy or ESG initiatives. This allows you to proactively plan upgrades that align with both compliance goals and tax credit opportunities.
2. Thoroughly document your accessibility efforts.
Every accessibility project should have an audit trail—contracts, consultant invoices, test results and before-and-after reports—that ties directly to ADA compliance. This documentation protects your credit claim and strengthens your company’s defense in the event of a lawsuit.
3. Align your internal teams.
Accessibility credit claims often live at the intersection of tax, technology and compliance. Finance teams can ensure documentation meets IRS standards, legal teams can validate ADA relevance, and developers can deliver the technical proof. Bridging those silos maximizes both compliance and credit recovery.
4. Work with expert accessibility and tax advisors.
Every business’s situation differs, even with clear IRS guidance. So it’s best to consult a tax advisor familiar with the IRS and an accessibility consultant who understands how to document digital improvements under ADA and WCAG standards. Together, they can help ensure your efforts are both compliant and credit-eligible, avoiding costly mistakes.
5. Reinvest tax savings.
The $5,000 annual credit may seem modest, but it’s renewable and cumulative. By reinvesting those savings into ongoing accessibility improvements, you’ll be able to move from reactive fixes to proactive inclusion strategies.
In conclusion, accessibility is often framed as an ethical or legal obligation, but it’s also a financial strategy hiding in plain sight. The smartest leaders don’t wait for lawsuits to act; they move early, integrate accessibility into their growth models and capture the financial upside that comes with doing the right thing.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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