To maintain your 501(c)(3) Nonprofit Public Charity in good standing in Washington, 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 Washington, 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 and renew your charitable registration with the Department of Social and Health Services.
Follow the Public Inspection Rules.
1. Apply for a state tax exemption.
A. Exemption from state income taxes
Nonprofit organisations are not exempt from business and occupation taxes in Washington. Nonprofits must pay a joint excise tax by January 31st of each year.
B. Exemption from state sales and use taxes
Nonprofits are taxed in the same way as regular companies in Washington.
Few Washington organisations will be qualified for use tax exemptions on certain donated products and retail services. RCW 82.12.02595 and WAC 458-20-169 have further information regarding these exemptions.
Visit the Washington State Department of Revenue’s website to learn more about nonprofit taxes.
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 organisation that has incorporated must have a registered agent with a Washington office location. If you change your registered agent or their office address, you must submit a Statement of Change/Designation of 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
The Washington Secretary of State requires charities to produce an annual report by the end of the month in which their registration anniversary occurs. You may file your report online or send it to the following address using this form:
Corporations Division, Secretary of State, 801 Capitol Way South, P.O. Box 40234 Olympia, WA 98504-0234
Failure to submit the required reports may result in a $25 overdue charge or dissolution of your organisation.
5. Obtain Permits and Licenses
Nonprofits in the state of Washington must get a general business licence. You have three choices:
Option 1: By Mail Nonprofits may register for a licence by completing the Business License Application, which may be found on the Department of Revenue’s website, and submitting it to the Department of Revenue, along with your payment.
Option 2: In-Person Nonprofits may apply in person for a business licence at one of the Department of Revenue’s business licencing offices.
Option 3: Apply Online Through the State of Washington’s Business Licensing Service, nonprofits may can apply for their business licence online.
6. Register/Renew Your Charitable Status
Charitable Washington organisations are normally needed to register with the Corporations & Charities Division of the Washington Secretary of State. Registration (as well as annual renewal) may be done online or by mail.
Some charitable charities with annual contributions of less than $50,000 may be excluded from registration. To learn whether your group is exempt from registering, see the Corporations & Charities Division’s Self-Assessment Guide.
7. Apply to the Department of Social and Health Services.
If your organisation intends to hire people, you must register with the Washington Department of Social and Health Services.
Registration is simple and may be done online. You may also find contact information for your local workforce commission.
Visit the Washington Employment Security Department’s website to learn more about your unemployment tax duties.
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.