Associations & Non-Profits Did You Know That You Can Get $5,000 Tax Credit

Summary

Some say success lies in the details. Jonathan is no different. In this post, Jonathan brings our attention to a less-frequently utilized tax credit. How much better could your organization’s website have been with an extra $5,000.00 to spend on its development? Read on for the details and find your own success. 

 

Associations & Non-Profits Did You Know That You Can Get a $5,000 tax credit from the US government to make websites?

Nonprofit organizations play a crucial role in providing charitable contributions and support to those in need. However, navigating the complex world of tax credits, deductions, and IRS regulations can be daunting for these organizations. In order to maintain their tax-exempt status and qualify for various tax benefits, nonprofits must adhere to strict guidelines set forth by the Internal Revenue Service (IRS) and state tax authorities.

One key aspect of this process is understanding which contributions made to nonprofits are tax-deductible for donors and how these charitable deductions impact an organization’s tax return. Additionally, nonprofits must be cognizant of employee retention, payroll deductions, and various tax forms required by the IRS, such as Form 990 and Form 1040. Furthermore, in light of the COVID-19 pandemic, many nonprofits have also utilized Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans, which may impact their taxes and overall financial health.

Key Takeaways

• Navigating tax credits, deductions, and IRS regulations is crucial for nonprofit organizations to maintain their tax-exempt status and qualify for tax benefits.
• Donors’ tax-deductible charitable contributions and employee retention play a significant role in nonprofits’ tax returns and overall financial health.
• The COVID-19 pandemic has introduced additional financial complexities for nonprofits, including the use of relief programs such as PPP loans and Economic Injury Disaster Loans.

What Does It Mean for Associations & Non-Profit Websites to Be ADA-Compliant?

Being ADA-compliant means that an association’s or non-profit’s website is designed and developed so that it can be easily accessed and used by individuals with disabilities. The Americans with Disabilities Act (ADA) has specific guidelines for websites to ensure that they are accessible to all users, including those with varying degrees of visual, auditory, cognitive, and physical impairments.

 

To achieve ADA compliance, website developers and administrators must follow the Web Content Accessibility Guidelines (WCAG), which are internationally recognized standards for web accessibility. These guidelines are organized into three levels of conformance: A (minimum), AA (recommended), and AAA (advanced). Most organizations aim for Level AA compliance as a good balance between accessibility and technical feasibility.

Several key areas need to be addressed for a website to be ADA-compliant:

1. Text alternatives: All non-text content, such as images and multimedia, should have a text-based alternative (e.g., alt text) to convey information. This makes it accessible to people using screen readers or other assistive technologies.

2. Keyboard access: Users should be able to navigate and interact with the website using only a keyboard without needing a mouse or other pointing device.

3. Consistent layout and structure: A consistent layout and structure across the website helps users with cognitive impairments to navigate and understand content. This includes using consistent headings, labels, and navigation elements.

4. Clear language and typography: Language should be clear, concise, and easy to understand. Font size, color contrast, and line spacing should be chosen to optimize readability for users with visual impairments.

5. Flexible design: Websites should be flexible enough to accommodate different devices, screen sizes, and orientations and allow users to adjust text sizes and colors according to their needs.

6. Time-based media: All pre-recorded audio or video content should be provided with transcripts, captions, and audio descriptions to make it accessible for users with hearing and vision impairments.

7. Error prevention and recovery: Forms and other interactive elements should be designed to minimize and handle errors, with clear instructions and suggestions to help users complete tasks.

In conclusion, an ADA-compliant website offers an inclusive experience for all users, ensuring that associations and non-profits can effectively engage with their intended audience. Achieving ADA compliance is not only a legal requirement but also a demonstration of commitment to social responsibility and inclusion.

What Can Happen if Your Association & Non-Profit’s Website Is Not ADA Compliant?

In today’s digital age, a significant number of individuals rely on the Internet to access information, resources, and services. Associations and non-profits are no exception in catering to this need for accessibility. However, if your organization’s website is not compliant with the Americans with Disabilities Act (ADA), it may result in several adverse outcomes that could have been easily avoided. Some of these consequences include:

• Legal Issues: Non-compliance with ADA standards can lead to potential lawsuits from individuals with disabilities who are unable to access your website. These lawsuits can be time-consuming and costly for your organization.

• Loss of Potential Donors and Volunteers: A website that is inaccessible to people with disabilities may deter potential donors and volunteers from engaging with your organization. By making your website ADA-compliant, you can ensure that all interested parties have equal access to information about your cause and opportunities to get involved.

• Damage to Reputation: Failing to provide an accessible website can cause negative perceptions of your organization and may result in a tarnished reputation. Public opinion can play a crucial role in the success of any non-profit, and an ADA-compliant website sends a clear message of inclusion and fairness.

To ensure your website meets ADA guidelines, consider taking the following steps:

1. Perform an Accessibility Audit: Evaluate your website for potential barriers and identify areas where improvements can be made.

2. Implement Web Content Accessibility Guidelines (WCAG): Consult the WCAG to ensure your website adheres to best practices for accessibility.

3. Utilize Assistive Technologies: Incorporate tools such as screen readers and other aids to support users with disabilities in navigating your site.

4. Train Staff and Volunteers: Ensure that all team members are familiar with ADA requirements and understand the importance of maintaining a compliant website.

5. Monitor and Update Regularly: Keep your website up-to-date and ensure ongoing compliance by regularly reviewing its accessibility features and addressing any issues that may arise.

By taking these steps, your organization can confidently provide an inclusive, accessible online experience for all users and avoid potential pitfalls associated with a non-ADA-compliant website.

Associations & Non-Profits: How to Do an Accessibility Audit

What Is an Accessibility Audit?

An accessibility audit is a comprehensive evaluation of a website or digital platform to ensure that it meets accessibility standards for individuals with disabilities. It involves analyzing the site’s structure, design, and functionality and identifying any barriers that would prevent a user with a disability from easily accessing and understanding the content. This can include issues with navigation, readability, and compatibility with assistive technologies such as screen readers.

When Is the Right Time to Do an Accessibility Audit?

It’s important for associations and non-profits to prioritize accessibility and consider performing an audit in the following situations:

• Redesign or significant update: If your organization’s website is undergoing a major overhaul, it is an excellent opportunity to address accessibility issues.
• New regulations or legal requirements: Changes in laws or industry guidelines may necessitate an accessibility audit to ensure compliance.
• Increased awareness and commitment: Incorporating accessibility should be part of an organization’s ongoing commitment to inclusivity and equality.

WCAG Conformance Levels and Accessibility Audits

The Web Content Accessibility Guidelines (WCAG) is a widely recognized international standard for web accessibility. The WCAG offers three conformance levels, which can serve as a reference point during an accessibility audit:

1. Level A: Basic accessibility features required for access by users with disabilities.
2. Level AA: Addresses additional accessibility issues, often recommended for non-profit and governmental organizations.
3. Level AAA: The highest level of accessibility, but may not be achievable for all websites due to complex requirements.

Below is a brief overview of the process involved in conducting an accessibility audit:

1. Establish goals and desired WCAG conformance level: Determine the specific accessibility objectives and compliance level your organization aims to achieve.
2. Content inventory: Compile a list of all web pages, multimedia elements, and other resources that need to be evaluated.
3. Automated testing: Use accessibility testing tools to scan webpages for issues, such as improper labeling, color contrast violations, and improper keyboard navigation.
4. Manual testing: Conduct manual tests on the site for issues that automated tools might miss, like context-sensitive page titles, meaningful link text, and appropriate heading structure.
5. Documentation: Record any issues that have been identified and create a report detailing findings and recommended improvements.
6. Remediation: Implement changes to address the issues identified in the audit and ensure a more accessible user experience.

By following this process, associations and non-profits can ensure that their digital platforms are inclusive and accessible to all users, regardless of their abilities.

How May Your Non-Profits and Associations Apply for the ADA Tax Credit for Websites?

Who Qualifies and What Expenses Are Covered

The ADA tax credit is a valuable resource for non-profit organizations and associations seeking to make their websites more accessible. This federal tax credit was designed to help nonprofits cover the costs associated with making their websites compliant with the Americans with Disabilities Act (ADA).

To qualify for the ADA tax credit, your organization must:

• Be a non-profit or an association as defined by the Internal Revenue Service (IRS)
• Have gross receipts of less than $1 million or 30 or fewer full-time employees
• Apply for the tax credit for the costs associated with ADA website compliance.

The ADA tax credit can cover 50% of eligible expenses between $250 and $10,250. This means that a maximum credit of $5,000 can be claimed per tax year. Eligible expenses include:

• Evaluation of website accessibility by a qualified professional
• Web design and development related to improving accessibility
• Purchase of website accessibility tools and services, such as screen reader compatibility software
• Employee training on managing an accessible website.

To apply for the ADA tax credit, your organization should take the following steps:

1. Keep detailed records and receipts of expenses related to ADA website compliance. This documentation is crucial when claiming the tax credit on your tax return.
2. Complete IRS Form 8826, which is the form used to claim the tax credit for making your website ADA-compliant. You can find this form and its instructions on the IRS website at www.irs.gov.
3. Attach Form 8826 to your organization’s tax return when filing it with the IRS.

Please note that this information is intended as a general guide. It’s essential to consult a tax professional for guidance on your organization’s specific circumstances and to ensure compliance with all federal and state tax regulations.

Frequently Asked Questions

Q: What is the $5,000 tax credit available for Associations & Non-Profits in 2021?

A: The $5,000 tax credit is available for nonprofit organizations to incentivize charitable donations and contributions made in the year 2021.

Q: How can nonprofits benefit from the tax credit for charitable deductions?

A: Nonprofits can benefit from the tax credit by encouraging supporters to make cash and non-cash donations, which can result in substantial deduction opportunities when filing federal taxes.

Q: What are the requirements to qualify for the tax credit for non-cash donations as a nonprofit?

A: To qualify for the tax credit for non-cash donations, nonprofits must ensure that the donations are made to eligible charitable organizations and document the fair market value of the donated items.

Q: Can nonprofits claim the tax credit for both cash and non-cash donations?

A: Yes, nonprofits can claim the tax credit for both cash and non-cash donations, as long as the donations are made to qualifying organizations and meet the necessary criteria for the deduction.

Q: How can nonprofits file for the tax credit for charitable contributions using Form 8283?

A: Nonprofits can file for the tax credit for charitable contributions using form 8283 when itemizing deductions on their federal tax return. This form provides detailed information about non-cash donations made throughout the year.

Q: What are the benefits of the tax credit for employee retention in nonprofits?

A: The tax credit for employee retention helps nonprofits reduce their taxable income by incentivizing employee retention through financial incentives, ultimately supporting the organization’s long-term sustainability.

Q: Are there additional federal filing requirements for nonprofits to claim the tax credit for charitable deductions?

A: Yes, nonprofits may be required to file additional federal forms, such as form 8283, depending on the type and amount of charitable contributions made to ensure accurate deduction reporting for tax purposes.

Final Thoughts

The Employee Retention Tax Credit is a valuable tool for nonprofits impacted by the COVID-19 pandemic. These organizations should be aware of the qualifications and requirements for this credit. To maximize the benefits, a nonprofit should consult a tax professional for guidance.

Nonprofits must keep accurate records and ensure they are eligible for the tax credit. It is recommended that donors receive the proper receipts for charitable contributions, as these donations can be deducted from the donor’s tax return. Payroll records should be maintained, including wages paid and the number of full-time employees.

The following are key dates to remember:

• Tax Years: 2020 and 2021
• Calendar Quarters: 2021
• Publication 526: Charitable Deduction guidelines
• Forms 1040 and 990: Required for nonprofits and donors

Some useful resources to consult are the Internal Revenue Service (www.irs.gov) and state tax authority websites, as well as trade or business publications for tax advice.

Remember that the Employee Retention Tax Credit is designed to help nonprofits maintain operations during difficult times. Stay informed and diligent about tax regulations and processes to ensure your organization receives the maximum benefits it is entitled to.