Prep Now to Take Advantage of New Tax Credits for Nonprofits
To take advantage of the Employee Retention Credit that provides a tax credit of up to half of up to $10,000 in employee wages, nonprofits need to provide a head-spinning array of documentation to the IRS, including the total qualified wages for each calendar quarter, as well as qualified sick leave and family leave wages.
To make matters even more complicated, the specific requirements may change because the Taxpayer Certainty and Disaster Tax Relief Act that was passed in December 2020 amended and extended the Employee Retention Credit and the availability of certain advance payments of the tax credits.
This is just one example of the types of pandemic-related aid programs your nonprofit may want or need to take advantage of in the year ahead. The question is: Are you ready? Or will you be so overwhelmed by the hassles of applying that you may miss out on opportunities to help your organization and your employees?
To prepare to take advantage of the Employee Retention Credit and other programs, nonprofit organizations should consider replacing outdated accounting systems that limit visibility and require hours of manual data entry. Best-in-class cloud-based accounting software solutions like Sage Intacct make it much easier to access the detailed, up-to-date information and documentation you need to apply for the latest tax credits.
Sage Intacct gives you a complete, real-time view of your consolidated numbers and summaries, and allows you to report by fund, grant, or location. You can slice and dice all your data however is necessary to identify the details required to apply for tax credits and other programs.
Sage Intacct can also help you automate and streamline your core financial operations, including accounts payable, allocation workflows, and approvals. You can more easily manage grants, programs, and funds, and you can closely track both qualified and non-qualified expenses, monitoring performance and impact measures over time to improve your internal decision-making.
Insero & Co. is a public accounting firm with decades of experience working with nonprofits of all sizes. Our experienced experts provide outsource accounting services, audit services, employee benefit plan audits, and other services to help organizations achieve their missions.