The Nonprofit Compliance Checklist: Essential Steps to Keep You on Track

Once your nonprofit receives 501(c)3 status, ensuring continued compliance with IRS regulations is essential. Even though nonprofits are tax-exempt, most are required to file Form 990 with the IRS annually. This examination by the IRS helps ensure that nonprofits are operating properly. State-by-state compliance requirements vary, but should also be reviewed annually.

This blog post will guide you through the essential steps for staying compliant and provide a checklist to keep you on track. 

What IRS Filings Are Required for Tax-Exempt Nonprofits? 

Form 990 is the IRS's primary tool to gather information on nonprofits and verify that these organizations remain compliant. If you fail to file your 990 for three consecutive years, the IRS will automatically revoke your 501(c)(3) tax-exempt status. 

An exempt organization that typically has $50,000 or more in gross receipts – which is defined as the total amount your organization received from all funding sources during its annual accounting period without subtracting any costs or expenses – is required to file either Form 990 - Return of Organization Exempt from Income Tax, or Form 990-EZ - Short Form Return of Organization Exempt from Income Tax. 

Small organizations with annual gross receipts less than $50,000 are not required to file a yearly return but may be required to file an annual electronic notice or e-Postcard.

There are four different Form 990s you can file. The criteria for filing the various forms depends on your nonprofit's financials and if your nonprofit is classified as a private foundation or public organization. You can visit the IRS website's Filing Phase-In for more information about which return to file.

The Four Types of Form 990s You Need to Know

• 990-N (e-Postcard): For nonprofits with annual gross receipts less than $50,000, Form 990-N must be completed and filed electronically.

• 990 EZ: For nonprofits whose annual gross receipts are less than $200,000 and have total assets that are less than $500,000.

• 990: Required for nonprofits with annual gross receipts greater than or equal to $200,000, or with total assets greater than or equal to $500,000.

• 990-PF: Required for all private foundations, regardless of financials and assets

When Is Form 990 Due?

Form 990 is due on the 15th day of the 5th month after the organization's fiscal year ends. (For example, if you are an organization whose fiscal year ends on June 30, 2009, the due date would be November 15, 2009.) 

If the due date falls on a Saturday, Sunday, or a legal holiday, the due date is the next business day. You can request an extension for six months without showing cause by filing Form 8868 before the due date. Your organization will only be allowed an extension of 6 months for a return for a tax year. 

How Do You Know What Your Exempt Organization's Tax Year Is? 

A tax year is usually 12 consecutive months. There are two kinds of tax years:

• Calendar Tax Year: This is a period of 12 consecutive months beginning January 1 and ending December 31. 

• Fiscal Tax Year: This is a period of 12 consecutive months ending on the last day of any month except December. For example, July 1 - June 30 is a common fiscal year.

If you don't know your organization's tax year, you can typically find it listed in the following documents:

• Your organization's bylaws

• Your application for federal tax-exempt status (Form 1023) or the determination letter you received approving your tax-exempt status

• Your EIN documentation

• A copy of a prior year's return, Form 990, or 990-ez that you filed with the IRS

Need help with how to navigate through compliance reporting? The Resilia Nonprofit Platform offers resources to guide you through the process! 

Checklist for Nonprofit Compliance Requirements 

If your organization participates in fundraising activities (most nonprofits do), then you will need to know your state’s fundraising rules and regulations so you remain compliant. Below is a checklist of what you need in your first year as well as best practices for high-performing nonprofits.

☐ Your Nonprofit’s Organizing documents 
☐ Certificate of Incorporation 
☐ Employer Identification Number
☐ Determination Letter 
☐ Bylaws 
☐ Conflict of Interest Policy 
☐ Code of Ethics Policy 
☐ State Charitable Registration, if applicable 
☐ State Tax Exemption, if applicable 
☐ State Annual Report
☐ 990 Tax Return

High-Performing Nonprofits Require Additional Documents Including:

☐ Board of Directors Information 
☐ Board Member Biographies 
☐ Board Member Resumes
☐ Board Member Affiliations
☐ Board Meeting Calendar 
☐ Board Meeting Minutes 
☐ Financial Policies 
☐ Annual Budget Plan
☐ Strategic Planning Document 
☐ Gift Acceptance Policy 
☐ Annual Fundraising Plan

While compliance can often feel overwhelming and be easily overlooked, it’s critical to stay organized to ensure your nonprofit retains its 501(c)(3) status. 

At Resilia, we understand how stressful and time-consuming compliance reporting can be for nonprofits. That’s why the Resilia platform offers all the resources to support you. You'll have everything you need, from templates, courses, and checklists to personalized 1:1 coaching from a nonprofit expert for compliance guidance. 

Sign in to your account, or sign up for the Resilia Nonprofit Platform today!