Why Accountable Plans Matter More for Nonprofits Than Anyone Else

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For small non-profit organizations in the US, accountable plans are a crucial tool for expense management. These plans allow you to reimburse employees for expenses related to business travel, meals, and entertainment, while also providing a way to track and verify those expenses. For the bigger picture, see our guide to expense management for non-profit organizations.

Incurdesk expense report "Expense Report" with columns Date, Category, Employee, Amount, listing 2022-01-01, 2022-01-15, 2022-02-01 — Sample Expense Report for a Small Non-Profit (sample data)

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Common Pitfalls and Best Practices for Managing Accountable Plans

Policy must be in place before expenses are incurred and reimbursed. Accountable plans cannot be applied retroactively to expenses that have already been reimbursed under a non-accountable system.

To avoid errors, make sure to:

Establish a clear policy before reimbursing employees for expenses.
Require employees to submit receipts and documentation for all expenses.
Verify that expenses are reasonable and necessary.
Keep accurate records of all expenses and reimbursements.

Additionally, be aware of specific state or local regulations that may affect how reimbursements are handled or reported. Check with your state or local government to ensure compliance.

Incurdesk expense policy "Expense Policy Rules" with rules such as Employee must submit receipts for all expenses (); Expenses must be reasonable and necessary () — Verify expenses are reasonable and necessary for reimbursement (sample data)

Keeping this simple: Incurdesk keeps receipts and approvals in one place, which makes a written policy easier to follow. It is built for small non profits teams. Try it free.

2026 Rates and Updates: Impact on Nonprofit Accountable Plans

Nonprofit organizations should check the official government website for the most up-to-date rates, which vary by location. These rates can be found on the General Services Administration website.

Keeping accurate records is crucial to ensure compliance and maximize reimbursement under an accountable plan.

Incurdesk approval queue "Awaiting Approval" showing 3 expenses awaiting review, including Office supplies (Pending), Travel expenses (Pending), Event registration fees (Approved) — Expenses awaiting approval for reimbursement (sample data)

What is an Accountable Plan and Why Does it Matter for Nonprofits

What is an Accountable Plan and Why Does it Matter for Nonprofits?

This can save your nonprofit money on taxes and help reduce the administrative burden of tracking and reporting employee expenses.

One of the benefits of an accountable plan is that it can reimburse 100% of meal and entertainment expenses.

This can help ensure compliance with tax laws and regulations and provide a clear framework for reimbursing expenses.

To establish an accountable plan, your nonprofit should create a formal, written policy that outlines the procedures for submitting and reimbursing expenses. This policy should include guidelines for what types of expenses are eligible for reimbursement, how expenses will be documented and verified, and how reimbursement will be handled.

Incurdesk expense policy "Accountable Plan Policy" with rules such as Meals and entertainment expenses must be 100% reimbursed (None); Expenses must be documented and verified... — Expense rules to ensure compliance and reimbursement (sample data)

Accountable Plan Cost as a Percentage of Revenue

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Benefits of Implementing an Accountable Plan for Nonprofit Organizations

Implementing an accountable plan can have numerous benefits for nonprofit organizations. For expenses to be eligible for reimbursement under an accountable plan, they must have a clear and legitimate connection to the nonprofit's mission and operations.

The nonprofit avoids paying the employer's share of payroll taxes (FICA) on these reimbursed amounts.

Reimbursement under an accountable plan can also provide a convenient way to manage business expenses and ensure that employees are not personally responsible for paying back expenses that are not related to the nonprofit's mission.

When implementing an accountable plan, it's essential to ensure that all expenses are properly documented and that employees understand the plan's requirements and guidelines. This can help minimize the risk of errors or misclassification of expenses.

Incurdesk approval queue "Pending Expenses" showing 4 expenses awaiting review, including Office supplies (Pending), Travel expenses (Pending), Event expenses (Pending) — Expenses awaiting approval by the office manager (sample data)

Frequently Asked Questions

Can I reimburse myself for home office expenses?

Yes, you can reimburse yourself for home office expenses if they are directly tied to the employer's business needs and not personal use, and proper substantiation is provided. Keep detailed records of your expenses, including receipts, to support your reimbursement claims.

Can an accountable plan be created retroactively?

No, an accountable plan cannot be created retroactively.

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