Creating and operating a nonprofit organization is no easy feat. There is so much work that goes into establishing and maintaining the organization’s good standing with the IRS and in many cases, their state as well.
In this blog, we will focus on the specific reporting requirements for the State of Alabama. In addition to completing and filing their 990 Series Return with the IRS each year, nonprofits must also meet certain requirements with the state agency.
Here is a quick guide to Alabama Nonprofits filing requirements.
How are Nonprofits founded in the State of Alabama?
Let’s start at the beginning – how nonprofits are established in the state of Alabama. There is a complete process for incorporation that all nonprofits must follow. It’s not as simple as creating a nonprofit’s name and mission statement to begin collecting donations from the public. Here is an overview of what is required.
Registration with the Office of the Secretary of State:
Nonprofits must be registered with the Office of the Secretary of State by submitting the organization’s name and a Certificate of Incorporation. This certificate can be found here. This requires specific information such as the purpose of incorporation and details about the incorporators.
Registration with the Attorney General’s Office
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- Before any nonprofit can begin operations it must register with the Attorney General’s office. This is done by completing the Charity Initial Filing and paying a $25 registration fee.
- Once these steps have been completed successfully, the nonprofit can begin operations, specifically accepting donations.
Maintaining Good Standing – Annual Requirements with Alabama
Once the organization has been incorporated and registered with the state it can begin operations, however, the process is never truly over for as long as the organization exists. There are annual filing requirements that must be met with the IRS state.
Federal Filing of 990 Series Returns:
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- Depending on how the organization is structured, the value of its assets, and the amount of gross receipts it collects, one of the 990 Series Returns must be filed with the IRS each year.
- This form is used to show the IRS, and the public how the organization is generating donations and more importantly where that funding is being used, through programs and services.
- The deadline to file 990 return is typically the 15th day of the 5th month following the end of the organization’s accounting period.
Annual Filing with the State of Alabama:
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- Nonprofit organizations operating in the State of Alabama must file an Annual Renewal Statement. In addition to filing this statement, the organization must pay a $25 renewal fee and attach a copy of their 990 Series Return. This Annual Renewal can be completed and submitted online to the Alabama Attorney General’s Office.
- The deadline for filing the annual renewal with Alabama is generally within 90 days following the end of the organization’s accounting period. For organizations operating on a calendar year, this is March 31st.
Additional Annual Filing Requirements for Organizations:
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- There is a potential for additional filing requirements, depending on the organization’s revenue-producing activities. If an organization generates unrelated business income (UBI), or funding that is raised through an activity that is directly related to their mission, it must be reported to the IRS.
- When an organization generates a UBI totaling $1,000 or more, they must file Form 990-T with the IRS in addition to their 990 Series return. Additionally, they must complete Form 20C and submit it to the State of Alabama with a copy of the 990-T attached.
- The deadline to submit Form 20C with the State of Alabama is the 15th day of the 6th month following the end of the organization’s accounting period.
Are there any Penalties for Non-Renewal with the State of Alabama?
- Yes, there are penalties for organizations that fail to comply with the annual renewal requirements.
- Organizations that continue to engage in the solicitation of contributions without completing their annual renewal as required by the state can become liable for a penalty of up to $5,000.
- Organizations that fail to submit their Form 20C by their deadline can become liable for a penalty of 10% of the tax due, or $50, whichever is greater. Any taxes that are not paid by the deadline are subject to a penalty of 1% per month for each month that they are late with a maximum of 25%.
Maintain Tax-Exempt Status with the Help of Tax990!
- With the deadline for Alabama nonprofits that operate on a calendar year coming up on March 31st for organizations following the calendar year, Tax990 is here to help you complete your 990 Series Return ahead of time! Then, before March 31st arrives you can simply download and print your completed 990 Return to attach to the Annual Renewal. Already filed a 990 series return with Tax990? The State of Alabama will accept an attached copy of a previous year’s return as well.
- With Tax990, the filing process is made simple, offering both a direct-form entry option and an interview-style filing. Moreover, the filing process incorporates IRS Business Rules to detect common errors, ensuring more accurate and efficient e-filing of 990 returns! Plus, you can collaborate with your team all from a single, secure account, and you can share the 990 for review and approval with the key members of your organization before IRS transmission.
- Tax990 provides a comprehensive filing experience, including the required 990 schedules at no extra cost. It supports the filing of amendments, and in the event of a rejection, you can correct and retransmit your 990 return at no additional charge.
Ready to begin the process with Tax990? Create your free account today!
