To maintain your 501(c)(3) Nonprofit Public Charity in good standing in New Mexico, follow this advice.
Table of Contents
8 Ways to Keep Your Nonprofit Legal
In order to keep your 501(c)(3) nonprofit company in New Mexico, 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 Tax
When your nonprofit obtains its 501(c) decision letter from the IRS, it is instantly excluded from paying corporation income taxes.
You should register with the New Mexico Taxation and Revenue Department if you want to apply for a Gross Receipts Tax Exemption (below). Fill out form ACD-31015 on the Taxation and Revenue Department’s website or register online to register for state tax accounts.
B. Exemption from Gross Receipts Tax
Most NGOs in New Mexico will be required to pay Gross Receipts Taxes. Educational and social organisations are the only groups that are normally exempt from paying gross receipts taxes.
Read the Nonprofit Gross Receipts Brochure and Tax Information for Nonprofits publications produced by the New Mexico Taxation & Revenue Department to learn more about the Gross Receipts Tax.
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 organisation that has formed must have a registered agent with a New Mexico office location. You must inform the Secretary of State whenever your registered agent or their office address changes so that your Articles of Incorporation may be revised. Changes to business information, such as registered agent, may be altered using the Secretary of State’s Online Business Portal.
Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Submit Periodic Reports
Nonprofits in New Mexico must submit up to two reports each year:
Annual Report with the New Mexico Secretary of State – You must submit an annual report with the New Mexico Secretary of State within four and a half months after the conclusion of your organization’s fiscal year. Annual Reports may be submitted electronically using the Secretary of State’s Online Business Portal.
Annual Report with the Attorney General of New Mexico – Charitable charities must also submit an annual report with the Attorney General of New Mexico. These reports may be submitted online and are due 6 months after the conclusion of your organization’s fiscal year.
Failure to submit the required reports may result in the termination of your company.
5. Obtain Permits and Licenses
The majority of NGOs in New Mexico will not need a general business licence at the state level. Check with your city or county clerk to see if there are any local restrictions you must follow.
If your organisation intends to hold charity games such as bingo or raffles, you must get a licence from the New Mexico Gaming Control Board. On the Gaming Control Board’s website, you may find additional information regarding charity gaming licences as well as an application form.
6. Registration of Charities
Before collecting donations or within 30 days of founding your organisation, charitable New Mexico charities must register with the New Mexico Attorney General. This registration, as well as future renewals, may be accomplished quickly online at the Attorney General’s website.
7. Workers
If your organisation intends to hire people, you must register with the New Mexico Department of Workforce Solutions as well as the New Mexico Taxation and Revenue Department.
The New Mexico Department of Workforce Solutions allows nonprofits to register for unemployment taxes online. The New Mexico Taxation and Revenue Department allows nonprofits to register online for withholding and workers compensation taxes.
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.