Obtaining 501c3 approval is an important, if not the most important goal of a new nonprofit organization. Being exempt from federal taxes comes with several benefits that a nonprofit can use to carry out their programs and services. That being said, obtaining 501c3 approval is not something that can be done over night. On the contrary, it is something that is done over the course of many, many nights. In order for the IRS to grant a nonprofit organization 501c3 approval, the nonprofit must first submit a 501c3 application. That is only one piece of the puzzle, however. There are other filings that are required to ensure that the nonprofit can operate at optimal, legal capacity. In the state of New Jersey, that means filing a charity registration, income tax exemption, and a sales tax exemption on top of the 501c3 application.
Organizing Documents Are First
Before doing anything else, a nonprofit organization in New Jersey should first put together their Bylaws and Conflict of Interest Policy. These are preliminary documents that are needed later down the road, so it is best to get them out of the way first (lest you forget about them entirely and run into all sorts of delays when it is time to submit your 501c3 application). Therefore, putting together your Bylaws and Conflict of Interest Policy is step number one. Once the documents are typed up, a nonprofit must have all board members sign. The signatures cannot be typed in or digitally signed, but 100% original.
After the Bylaws and Conflict of Interest Policy are taken care of, a nonprofit can now set their sights on incorporating. In New Jersey the incorporation form is known as the ‘Public Records Filing For New Business Entity’. It is filed with the State of New Jersey, namely their Division of Revenue. There are three ways for a nonprofit to file their incorporation: through the mail, in person over the counter, and online. Mailing in the articles takes the most time, yet you are able to include attachments that cannot be added when you file the incorporation online. Therefore, it is highly recommended that a nonprofit either mail in their incorporation document or take it over the counter, so that the necessary provisions from the IRS can be included on an attachment. Otherwise, if you file online and do not include the provisions, an amendment must be filed, thus taking more time and delaying the overall process. The fee to incorporate in the state of New Jersey is $75.00.
Documents After Incorporation
After a nonprofit is incorporated, they can move onto other state filings. The charity registration, which is required if the organization wishes to solicit for donations, is filed online. It is a fairly straightforward process, yet there are supporting documents that are required when filing the registration online. These documents consist of: a copy of the approved incorporation document, the CRI 200 signature page, signed Bylaws, and either the determination letter from the IRS or a copy of the 1023 form. Once all the supporting documents are uploaded, the opportunity to sign and pay for the registration will become available. The fee for the New Jersey charity registration is $30.00.
With the incorporation and charity registration finished, a nonprofit can look into the two remaining filings with the state: the income tax exemption form, and the sales tax exemption form. Both are similar yet require different paperwork to be filed in separate locations. The income tax exemption is put together in the form of a letter. The letter describes the nonprofit organization, it mission and goals, and lastly requests exemption from New Jersey income tax. The form is filed with the Regulatory Services Branch, under the New Jersey Division of Taxation, and there is no fee associated with it.
Sales Tax Exemption Is Filed After the IRS Approves You
The sales tax exemption form differs in the sense that it must be filed only AFTER the nonprofit receives their determination letter from the IRS. The department which receives it is still the same (the New Jersey Division of Taxation), yet the application is not the same. It is not written in a letter format, as there is a preexisting form that already exists. Like the income tax exemption form, there is no filing fee associated with the sales tax exemption.
Although form 1023, or the 501c3 application, can technically be filed after incorporation, some nonprofits like to wait until their state filings are taken care of first. Obviously this cannot be done with the forms that request for a determination letter, but ones that do not can be submitted first. In New Jersey specifically, the charity registration and income tax exemption form can be submitted before or at the same time as the 501c3 application.
The 501c3 application may require special attention if the nonprofit is a school, church, or hospital. Organizations such as these are required to look into the schedules that are found towards the end of the 501c3 application. However, if a nonprofit does not require a schedule then they do not have to worry about them. Regardless, all nonprofits are required to submit a copy of their signed Bylaws, signed Conflict of Interest Policy, and approved incorporation document when mailing in their 501c3 application. The same can be said for the $600 IRS filing fee.
If you are a nonprofit organization who wishes to incorporate and apply for 501c3 approval in the state of New Jersey, do not hesitate to contact CharityNet USA. Our professionals will make sure all the necessary steps are taken to ensure that you are 100% 501c3 approved, which includes taking care of your paperwork for you. Call us today at: 407-857-9002.