Follow this instructions to maintain your Alabama 501(c)(3) Nonprofit Public Charity in good standing.
7 Ways to Keep Your Nonprofit Legal
In order to keep a 501(c)(3) nonprofit company in Alabama, you must:
Apply for a state tax exemption.
Tax-exempt organisations must file annual federal returns.
Keep a Registered Agent on file.
Request permissions and licences
Employees with Charitable Registration
Follow the Public Inspection Rules.
1. Apply for a state tax exemption.
A. Exemption from state income taxes
Your organisation will be immediately exempt from corporation income taxes after you obtain your 501(c) decision letter from the IRS.
B. Exemption from state sales tax
The majority of NGOs in Alabama will not be exempt from state sales and use taxes. Check Alabama Statute 40-9-1 to see whether your organisation qualifies for an exemption. If so, you may apply using Form ST:EX-A1.
2. Tax-exempt Organizations’ Annual Federal Returns
A. Federal Annual Returns
The IRS requires most tax-exempt charitable organisations to submit an annual return (Check the IRS website for a list of exceptions).
An organization’s yearly gross receipts dictate which form should be utilised to submit the annual federal return.
The IRS defines ‘gross receipt’ as “the total sums the organisation received from all sources throughout its yearly accounting period, before deducting any expenditures or expenses.”
For gross revenues of $50,000 or more, file Form 990-N.
$200,000 in gross income and $500,000 in total assets —- File 990-EZ
If your gross revenues exceed $200,000 or your total assets exceed $500,000, you must file a 990 form.
If you have any concerns, please contact the IRS at
(800) 829-3676 (Form related questions)
(800) 829-1040 (general information)
Q: When is the 990 form due?
A: Form 990 is due on the 15th day of the 5th month after the end of the organization’s fiscal year.
For example, if the fiscal year closes on December 31st, the form 990 is due on May 15th.
NOTE: If an organisation fails to complete Form 990 for three years in a row, it will lose its tax-exempt status.
B. Unrelated Business Profits
If an organisation earns more than $1,000 from a trade or company that is unrelated to the organization’s declared purpose, it must submit Form 990-T to pay taxes on that revenue.
If your organisation anticipates to pay $500 or more in unrelated business income taxes for the year, you must pay a quarterly estimated tax on the unrelated business income using Form 990-W.
3. Keep a Registered Agent.
Any incorporated nonprofit must have a registered agent with an office location in Alabama. If you change your registered agent or their office location, you must complete a Change of Registered Agent or Registered Office form with the Secretary of State so that your Certificate of Formation may be amended.
Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Obtain Permits and Licenses
Nonprofits in Alabama will not be required to get a state-level business licence or permit. You should, however, check with your city/county clerk’s office to see if there are any local restrictions.
5. Registration as a charity
Alabama charitable charities must register with the Alabama Attorney General’s office. Registration may be done online at their website.
Nonprofit organisations will also have to renew their registration every year and submit an annual report. Both tasks may also be accomplished online.
If your organisation will employ people, you must register with both the Alabama Department of Revenue and the Alabama Department of Labor.
The Alabama Department of Revenue registration process is simple and may be done online. On the Alabama Department of Revenue website, you may also find contact information for your local taxpayer centre.
Fill out Form SR-2 to find out whether your company must pay unemployment insurance taxes.
7. Obey Public Inspection Rules
To comply with federal requirements governing 501(c)(3) organisations, you must make the following papers available to any member of the public who wants them:
Annual returns for your organisation may be filed up to three years after the due date (including the following Forms: 990-PF, 990-EZ, 990-T, and 990)
Any supporting documentation and attachments for the 990 forms listed above. For Schedule B, however, you simply need to indicate the kind of the gift and the amount given.
Official IRS documentation demonstrating that your group is tax-exempt.
Your organization’s exemption application and any supporting documentation filed with it (including Form 1023).
Your company is NOT required to share the following papers or information with the general public:
Any part of Schedule B of Form 990/990-EZ that names donors.
Anything deemed an adverse judgement, including past rejections of tax-exempt status.
Any extra information that the IRS is entitled to withhold, such as trade secrets, patents, and so forth.