Follow this instructions to maintain your 501(c)(3) Nonprofit Public Charity in Kentucky in good standing.
Table of Contents
8 Ways to Keep Your Nonprofit Legal
In order to keep a 501(c)(3) nonprofit company in Kentucky, 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
Register/Renew Your Charitable Organization
Employees
Follow the Public Inspection Rules.
1. Apply for a state tax exemption.
A. State income tax exemption
Once you obtain your 501(c) decision letter from the IRS, your organisation will be immediately excluded from corporation income taxes.
B. Exemption from state sales tax
Fill out Form 51A125 and submit it together with a copy of your Articles of Incorporation and IRS Determination letter to:
Department of Revenue Division of Sales and Use Tax P.O. Box 1274 Frankfort, Kentucky 40602-1274
Website: revenue.ky.gov/business (502) 564-5170
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 incorporated must have a registered agent with a Kentucky office location. If you change your registered agent or their office address, you must submit Form RAC with the Secretary of State so that your Certificate of Formation may be revised.
Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Submit Periodic Reports
Nonprofits must file an annual report to the Kentucky Secretary of State by June 30th of each year. These reports may be submitted electronically, by mail (by printing the annual report form from their web portal), or by filling out the annual report postcard that is sent to your organisation by USPS.
Remember that your annual report cannot be used to alter your registered agent, registered office, or primary office; instead, use the Statement of Change forms.
Failure to submit the required reports may result in the termination of your company.
5. Obtain Permits and Licenses
Local counties and towns oversee business licencing in the Commonwealth of Kentucky. Contact your local government authorities and check Kentucky’s One Stop Business Portal to find state-level connections to different permits and licencing requirements to see whether your organisation need a business licence.
6. Register/Renew Your Charitable Status
Charitable Kentucky charities must register with the Attorney General and must renew their registration every year.
The following documents must be submitted to the Attorney General for the first registration:
A copy of your IRS decision letter
a duplicate of your bylaws
A copy of your most recent IRS 990 form OR a Unified Registration Statement if you haven’t yet filed a 990. (URS)
These materials should be submitted to the Attorney General’s Office at 1024 Capital Center Drive, Suite 200, Frankfort, KY 40601.
Attention: Registration of Charities
Each year, you must send a copy of your IRS 990 form to the address above to renew your charity registration.
7. Workers
If your organisation intends to hire people, you must register with the Kentucky Department of Taxation as well as the Kentucky Office of Employment and Training.
Register for an employer withholding account with the Kentucky Department of Taxation through their website or by sending in Form 10A100. You may also use their website to register with the Kentucky Office of Employment and Training.
Access their information sheet for employers to learn more about employer responsibilities in relation to the Kentucky Income Tax.
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 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.