Follow this advice to maintain your Minnesota 501(c)(3) Nonprofit Public Charity in good standing.
Table of Contents
9 Steps to Keeping Your Nonprofit Legal
In order to keep a 501(c)(3) nonprofit company in Minnesota, 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
You must pay the Minnesota Franchise Tax.
Request permissions and licences
Registration of Charities
Employees Obey Public Inspection Regulations
1. Apply for a state tax exemption.
A. Exemption from State Income Tax
Your charity will be immediately excluded from corporation income taxes after you obtain your 501(c) decision letter from the IRS.
B. Exemption from state sales tax
Fill out Form ST16, Application for Nonprofit Exempt Status – Sales Tax, to apply for a sales tax exemption.
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.
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 Minnesota office location. If your registered agent’s office address or registered office address changes, you must submit a Change of Registered Office/Registered Agent form with the Secretary of State so that your Articles of Incorporation may be revised.
Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Submit Periodic Reports
Each year, the Minnesota Secretary of State requires organisations to file an annual renewal form by December 31st.
Failure to submit the required reports may result in the termination of your company.
5. Comply with the Minnesota Franchise Tax
If your organisation has unrelated business revenue, you must pay the Minnesota franchise tax. Form M4NP should be used if you need to pay Minnesota franchise taxes. The filing deadline is 4.5 months following the fiscal year end of your company.
You may submit the M4NP online or by mail. More information on the Minnesota Franchise Tax may be found on the Department of Revenue’s website.
6. Obtain Permits and Licenses
Nonprofits in Minnesota normally do not need a state-level business licence. However, they may be required to seek a permission or licence at the municipal level. To learn more about Minnesota business licencing, visit the Minnesota e-License Portal.
If your organisation intends to hold charitable games such as bingo or raffles, you must apply for a permission or licence from the Minnesota Gambling Control Board. For additional information, see their website.
7. Registration of Charities
Unless they qualify for an exemption, charitable Minnesota organisations will be forced to register with the Minnesota Attorney General. If you have registered as a charity, you must also submit an annual report to the Attorney General.
More information on charity registration may be found on the Attorney General’s website.
8.Employees
If your company will hire people, you must perform the following:
Become a member of the Minnesota Unemployment Insurance Unit – For additional information, complete your registration online and see the official Unemployment Insurance Employer Handbook.
Obtain a tax ID from the Department of Revenue – If you haven’t already, obtain a Minnesota Tax ID for your employer withholding account. If you have any issues about your business account, contact the Department of Revenue.
9. 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.