Menu Close

501c3 Compliance

Know what activities may jeopardize your status

  • Private Benefit and Inurement
  • Political Campaign Intervention
  • Legislative Activities

Keep Adequate Books and Records

  • Document all sources of receipts and expenditures
  • Keep donor records
  • Retain all supporting documents-such as grant applications and awards, sales slips, paid bills, deposit slips, cancelled checks
  • Prepare annual financial statements

File Your Form 990 (Annual Tax return for Exempt Organizations)

  • *Due the 15th day of the 5th month after the fiscal year end (For example, if the fiscal year ends December 31, the 990 is due on May 15th)
  • ALL organizations now required to file, regardless of revenue
  • Penalties imposed for not filing
  • Revocation of 501 status if not filed for 2 or more years in a row
  • Know ALL forms that must be filed, i.e. 990-T for unrelated business income and special filing requirements for supporting organizations

File Form 941 for Employees Quarterly

  • Like all employers, charities who pay wages must withhold, deposit, and pay employment taxes-including federal income tax, Social Security, and Medicare. This must be done for each individual paid more than $100 per year.

State Corporate/Franchise Tax Returns (Sometimes)

  • Be sure to obtain state level sales and income tax exemptions, if available in your state
  • If the organization is not granted state exemption, they must file and pay taxes!
  • In some cases, organizations exempt from state taxes must still file some sort of annual return (varies state to state)

Annual Reports (State level filing)

  • Each year the organization will file an annual report with their state to remain an active corporation.
  • Minimal information, updates basic organizational information
  • If you fail to file, your organization may be dissolved

Charitable Solicitation Registration (State level filing)

  • Most states now requires charities to become licensed before soliciting any donations in their state
  • Organizations must register prior to intiating any fundraising activities
  • If you will fundraise in more than one state, you must register in each state where you will seek donations
  • Registrations must be updated and renewed each year

Other filings (Vary)

  • Some states require other filings that are state specific
  • Encourage client to remain diligent in monitoring all required filings in their state.
  • (Ex.) California Statement of Information