Insights

Tax Incentives for Making Your Business Accessible to People with Disabilities

The Americans with Disabilities Act (ADA) provides protection from discrimination for people with disabilities. Part of this protection includes requiring public serving entities to provide reasonable accommodations for those with disabilities to access relevant services and establishments. This includes but is not limited to physical access, digital access, usability access. Additionally, accommodations may not only impact user or customer accessibility, but also the accessibility of employees.

In addition to this protection, the federal government offers tax incentives and grant opportunities to aid in compliance feasibility. In other words, these accommodations often incur costs. The government offers tax breaks and grant funding to qualifying businesses to offset these expenses incurred through ADA compliance efforts. The following resources and insights will expound on these tax incentives as well as highlight local and state level grant opportunities to aid in your organization’s pursuit of accessibility and inclusion.

Tax Incentives

One primary, federal incentive offered for accommodations made by small businesses is called the Disabled Access Credit. The Internal Revenue Service defines the parameters for this Disabled Access Credit as, “the disabled access credit is a non-refundable credit for small businesses that have expenses for providing access to persons with disabilities. An eligible small business is one that earned $1 million or less or had no more than 30 full-time employees in the previous year. The business can claim the credit each year they incur access expenditures.”

Read more about the Disabled Access Credit here.

These “expenses” can include a range of accommodations and updates in order to make your small business more accessible for employees, clients, or customers. The U.S. Department of Labor provides the following examples of accommodations:

“Physical changes

Installing a ramp or modifying a rest room

Modifying the layout of a workspace

Accessible and assistive technologies

Ensuring computer software is accessible

Providing screen reader software

Using videophones to facilitate communications with colleagues who are deaf

Accessible communications

Providing sign language interpreters or closed captioning at meetings and events

Making materials available in Braille or large print

Policy enhancements

Modifying a policy to allow a service animal in a business setting

Adjusting work schedules so employees with chronic medical conditions can go to medical appointments and complete their work at alternate times or locations”

What, if any, of these accommodations examples have you implemented in the last year to consider itemizing on your taxes? Additionally, what accessibility efforts are you considering implementing this year with the assistance of this incentive?

Tip: Maintaining itemized records of receipts and accommodation-related updates is essential for businesses to take full advantage of these incentives. This record keeping also allows for promotion of your accessibility and inclusivity efforts to your stakeholders as tangible displays of your commitment to compliance.

Another tax incentive offered by the IRS is the Work Opportunity Tax Credit. The IRS defines this incentive as “The Work Opportunity Tax Credit, or WOTC, is a general business credit provided under section 51 of the Internal Revenue Code (Code) that is jointly administered by the Internal Revenue Service (IRS) and the Department of Labor (DOL). The WOTC is available for wages paid to certain individuals who begin work on or before December 31, 2025. The WOTC may be claimed by any employer that hires and pays or incurs wages to certain individuals who are certified by a designated local agency (sometimes referred to as a state workforce agency) as being a member of one of 10 targeted groups. In general, the WOTC is equal to 40% of up to $6,000 of wages paid to, or incurred on behalf of, an individual who:

is in their first year of employment;

is certified as being a member of a targeted group; and

performs at least 400 hours of services for that employer.”

One of these “targeted groups” are vocational rehabilitation referrals. In other words, “a person who has a physical or mental disability and has been referred to the employer while receiving or upon completion of rehabilitative services pursuant to:

A state plan approved under the Rehabilitation Act of 1973

An Employment Network Plan under the Ticket to Work program or

A program carried out under the Department of Veteran Affairs”

This incentive is designed to foster inclusivity in your hiring and employment processes for individuals with disabilities. To take advantage of this credit, work with your tax specialist to include Form 3800 with your filing including proper certification of employment of individuals within one of the targeted groups.

Tip: Review these targeted groups to evaluate your current employment roster for missed opportunities to take advantage of this incentive. Additionally, work with your HR team to develop inclusive hiring goals and performance metrics with this incentive in mind.

In addition to these tax incentives, inclusive hiring and business practices are encouraged through the availability of grants. While tax incentives offer alleviation of incurred expenses via tax breaks, grants provide capital upfront to alleviate the initial cost of accommodations-related updates and offerings. Explore more national and state grants available to support your compliance efforts below.

Grants

Several grants are available for application by national departments and accessibility organizations to assist in a wide range of compliance-related efforts. These grants include but are not limited to the following categories:

Physical Accessibility Updates (ramps, widening entries, etc.)

Digital Accessibility Updates (website accessibility audits, screen reader compatibility integration, etc.)

Content Accessibility Updates (post-production captioning and ASL interpretation of videos)

Read more about these categories and available grants here!

Additionally, while grants are available for a wide variety of accommodations updates, they also exist for a variety of organizations to apply. This variety of qualifying organizations includes but is not limited to non-profits, small businesses, public service organizations, housing developers, builders, and more.

Success in being awarded grants largely revolves around strong grant writing and application. Check out these tips on successful grant applications from Top5Accessibility:

“Do you have a mission statement? If not, look for one, or create one.

Do you have up-to-date paperwork for all relevant by-laws?

Do you have your articles of incorporation (if relevant)?

Is there a full and current organizational chart for your org? You may need one of those.

How about a history of your organization? Have one ready. If you’re an individual, consider a medical history of your disability, and what needs the grant could help you fulfill.

Has your organization been audited? Check if that’s necessary. There are many kinds of audits, and you’ll need to have any relevant audits handled before you apply. You may also need a financial statement.

Are there any positive mentions of your organization in the media? Keep quotes, clips, and all other helpful public relations material ready.

Top up all office supplies you might need. You don’t want to run out of copier paper at a critical moment.”

While grants may not cover the entire cost of your compliance-related updates, they are commonly able to offset expenses considerably to allow every organization to pursue access. In addition to nationally available grants, several states offer locally organized grants for compliance-related updates. Below are a few examples of these grants available by state.

Grants Available by State

South Carolina: South Carolina offers grants matching up to $2,500 to assist “organizations make arts programs and existing facilities accessible to persons with disabilities.”

Minnesota: Minnesota’s “Department of Employment and Economic Development (DEED) Employer Reasonable Accommodation Fund (ERAF) creates a central fund where small to mid-sized Minnesota employers can request reimbursement for expenses related to providing reasonable accommodations for job applicants and employees with disabilities.”

Maryland: Access Maryland is a state-level program that provides “funding to state-owned facilities, university system of Maryland campuses, and state-owned parks to make continued accessibility upgrades, consistent with the Americans with Disabilities Act Accessible Design Standards of 2010.”

Rhode Island: The state of Rhode Island offers workplace accessibility grants to “to promote employment and economic opportunity for individuals with disabilities through investment in accessible workplaces.”

Be sure to research your state’s available grants when exploring your financing options for your accessibility updates.

Once awarded your grant, it’s important to use it strategically and track its implementation. Check out these tips from AccessForce on making the most of your grant:

“Creating an Accessibility Plan. Develop a comprehensive plan covering milestones to improve accessibility. This plan must have specific tasks, deadlines, and assigned personnel, as well as a monitoring procedure. Able-bodied individuals should participate.

Implementing Accessibility Improvements. With your accessibility plan in place, implement the necessary improvements. Hiring contractors, purchasing equipment, or providing training to staff are the basics. Be sure to document all expenses related to the grant-funded project.

Monitoring and Evaluating Accessibility Efforts. Monitor the project through assessments of whether there are improvements. Interviewing people about the effectiveness should also be a part of the monitoring. Make necessary adjustments according to the assessments conducted to ensure the information collected will be used to improve the project in a full range of accessibility efforts.

Ensuring Ongoing ADA Compliance. After completing the grant-funded project, continue to prioritize ADA compliance within the business or organization. Updating policies, providing training, and accessibility audits are parts of the consistent progression.”

Accessibility and inclusivity are not only legal obligations but also fundamental aspects of creating equitable opportunities for individuals with disabilities. By understanding and leveraging available tax incentives and grants, businesses and organizations can make meaningful strides toward ADA compliance without bearing the full financial burden alone. Whether through the Disabled Access Credit, the Work Opportunity Tax Credit, or various national and state-level grants, resources exist to support the implementation of accommodations that promote accessibility.

Proactively seeking out these opportunities not only benefits those with disabilities but also strengthens the overall business environment by fostering diversity, inclusivity, and customer satisfaction. As you consider your accessibility efforts, be sure to maintain detailed records, explore all applicable funding sources, and develop comprehensive plans to maximize the impact of your updates. By doing so, your organization can play an essential role in breaking down barriers and building a more inclusive future for all.