The filing requirements for nonprofits can vary greatly depending on the state in which the non-profit resides. In North Carolina, the obligations aren’t as extensive as some other states.
When establishing a non-profit in North Carolina, all organizations must file articles of incorporation with the Secretary of State in order to operate legally in the state. While some states require yearly disclosures, in North Carolina nonprofits are only required to update the Secretary of State when there is a change in the principal or office location or registered agent. During the establishment of the nonprofit, the organization will also need to file a Form 1023 with the IRS to apply for recognition of tax-exempt status under section 501(c)(3) in the tax code.
If an organization has more than $25,000 in grants and contributions per year, it is also required to maintain a Charitable Solicitation License that must be renewed by the 15th day of the 5th month each year. If the organization doesn’t meet the $25,000 threshold or if the nonprofit falls under the category of being a church, hospital, or school, then they are generally exempt from this requirement. YMCAs and YWCAs also fall under this exemption. Some exemptions are permanent, and some exemptions are required to be filed annually.
Additional filings are needed if the nonprofit has paid employees, sells retail items subject to sales tax, requests sales tax refunds, or reports unrelated business income of more than $1,000 for the year. Politically affiliated groups also have specialized filing requirements.
In addition to North Carolina requirements noted above, a Form 990 is required by the IRS for all nonprofits with 501(c)(3) status (tax-exempt organizations). This filing is due on the 15th day of the 5th month after the end of an organization’s fiscal year, with an option to extend by 6 months. Failure to file this form for three consecutive years will result in loss of tax exemption status. These filings are public information and can be obtained by anyone that requests it; however, there is some information within the return that is not public information (namely Schedule B contributors). This information is also often readily available to the public online at Guidestar.org.
There are three types of Form 990s that can be filed, depending on the amount of gross receipts and total assets of the organization.
- The 990-N exists for those nonprofits with less than $50,000 in total gross receipts for the year. It is the simplest version of the 990, in a single page postcard format. This postcard is filed electronically on the IRS website.
- The Form 990-EZ is for those organizations with more than $50,000 in total gross receipts but less than $200,000 and with less than $500,000 in total assets. The 990-EZ is only four pages long with significantly less information required than the full 990.
- The full Form 990 exists for those organizations with above $200,000 in total gross receipts or more than $500,000 in total assets.
If you have any additional questions on the reporting requirements for nonprofits in North Carolina, GBM is here to help answer your questions.