To maintain your 501(c)(3) Nonprofit Public Charity in good standing in Colorado, follow this advice.
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8 Ways to Keep Your Nonprofit Legal
In order to keep a 501(c)(3) nonprofit company in Colorado, you must:
Apply for a state tax exemption.
Tax-exempt organisations must file annual federal returns.
Keep a Registered Agent on file.
Submit periodic reports
Request permissions and licences
Registration of Charities
Employees
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
Nonprofit organisations in Colorado are not automatically exempt from paying sales tax. To see whether your group qualifies for an exemption, see these Colorado laws, which outline the state’s Charitable Organization categorization.
Apply for a sales tax exemption using Form DR0715 if you are qualified.
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)
FAQ
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 charity that has formed must have a registered agent with a Colorado office location. If you change your registered agent or their office address, you must submit a Statement of Change with the Secretary of State so that your Articles of Incorporation may be revised. This can only be submitted online, so be sure you read the Secretary of State’s instructions carefully.
Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Submit Periodic Reports
The Colorado Secretary of State requires nonprofits to file an annual report, which must be submitted by the end of your anniversary month each year (the month you incorporated). You may submit your periodic report online by visiting the Secretary of State’s website.
Failure to submit the required reports may result in the termination of your company.
5. Obtain Permits and Licenses
Permits and licences are administered by individual towns and counties in Colorado. Check with your local clerk’s office to see whether your group need any permissions or licences.
6. Registration of Charities
Charitable Colorado organisations must usually register with the Colorado Secretary of State through their website. Each year, you must renew your registration.
Consult the Colorado Statutes to see whether your group is exempt from registering. If your organisation is exempt, you may submit an exemption claim online.
7. Workers
If your organisation intends to hire people, you must register with both the Colorado Department of Revenue and the Colorado Department of Labor and Employment.
Registration is simple and may be done online using an unified registration form. You may also find the Colorado Department of Labor and Employment’s contact information online.
8. 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 identifies 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.