To maintain your 501(c)(3) Nonprofit Public Charity in good standing in North Carolina, follow this advice.
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8 Ways to Keep Your Nonprofit Legal
In order to keep your 501(c)(3) nonprofit company in North Carolina, you must:
Apply for a state tax exemption.
Tax-exempt organisations must file annual federal returns.
Keep a Registered Agent on file.
Pay the Franchise Tax in North Carolina.
Request permissions and licences
Register or renew your charitable registration with the Department of Revenue.
Follow the Public Inspection Rules.
1. Apply for a state tax exemption.
A. Exemption from state income taxes
When your nonprofit is incorporated in North Carolina, the Secretary of State will contact the Department of Revenue, who will then give you a questionnaire. To acquire state income tax exemptions, your organisation must complete and submit this form, together with a copy of its Articles of Incorporation and Bylaws.
B. Exemption from state sales tax
Nonprofits in North Carolina must pay sales and use taxes up front and then ask for a refund. You may request a refund twice a year, on June 30th and December 31st. To apply for a sales and use tax refund, fill out form E-585 and attach a cover letter with your nonprofit’s name, EIN, and a description of your activities/purpose. These papers are acceptable for mailing to the North Carolina Department of Revenue:
Raleigh, NC 27640-0640 PO Box 25000
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 North Carolina office location. If your registered agent or office address changes, you must submit Form BE-06 with the Secretary of State to revise your Articles of Incorporation. Your company may be terminated if you fail to inform the Secretary of State of this change.
4. Pay the Franchise Tax in North Carolina.
Unless the North Carolina Department of Revenue grants an exemption, every nonprofit operating in North Carolina will be compelled to pay a state Franchise Tax. You may apply for a franchise tax exemption together with your state income tax exemption.
5. Obtain Permits and Licenses
The majority of North Carolina charities will not need any form of general business licence. However, if you want to engage in particular activities, such as selling alcohol, you may need a special licence. Furthermore, if you want to do charity bingo, your organisation must seek a licence, and you may only have a raffle if you follow specific requirements.
If your organisation wants to offer bingo games, you must get a North Carolina Bingo License.
If you want to organise a raffle, your organisation must meet the General Assembly of North Carolina’s requirements.
6. Register/Renew Your Charitable Status
If a nonprofit organisation in North Carolina wishes to seek charitable donations, it must adhere to tight standards. The vast majority of benevolent nonprofit organisations will be required to register with the Secretary of State. For additional information, see the NC Section of the Secretary of State’s Charitable Solicitation Licensing department.
If your organisation needs to register or renew, or if you need to seek for an exemption, you may do so on the Secretary of State’s website.
7. File a tax return with the North Carolina Department of Revenue.
If your organisation intends to hire people, you must register with the North Carolina Department of Revenue.
Registration is simple and may be done online or by mail to the NC-BR. You may also find contact information for your local workforce commission.
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.