Obtaining 501(c)(3) 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 New Jersey nonprofit can use to carry out its programs and services.
That being said, obtaining NJ 501(c)(3) approval is not something that can be done overnight. On the contrary, it’s something that is done over the course of many, many nights. Before the IRS will approve a NJ 501(c)(3) application, the nonprofit must first submit a 501(c)(3) application. Then there are other required filings to ensure that the nonprofit can operate at optimal, legal capacity. In the state of New Jersey, you’ll need to file a charity registration, an income tax exemption, and a sales tax exemption on top of the 501(c)(3) application.
Organizing Documents Are First
Before applying for a NJ 501(c)(3), a nonprofit organization in New Jersey should first put together their bylaws and Conflict of Interest Policy. These preliminary documents will be needed down the road, so it’s best to get them out of the way first—lest you forget about them entirely and run into all sorts of delays when it’s time to submit your 501(c)(3) application.
Once the documents are drafted, the nonprofit must have all board members sign. The signatures cannot be typed or digitally signed; they must be 100% original.
After the bylaws and Conflict of Interest Policy are complete, the nonprofit can set its 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 in NJ to file for incorporation:
- Through the mail
- In person over the counter
Mailing the articles takes the most time, but it allows you to include attachments that cannot be added when you file the incorporation online. Therefore, it is highly recommended that you either mail in your incorporation document or submit it in person, thus ensuring that the necessary provisions from the IRS can be included. If you file online and do not include the provisions, you’ll have to file an amendment. This takes more time and results in further delays.
The fee to incorporate in the state of New Jersey is $75.00.
Documents After Incorporation
After NJ charities are incorporated, they can move onto other state filings. The charity registration, which is required if the organization wishes to solicit donations, is filed online. It is a fairly straightforward process, but there are supporting documents that are required. These documents include:
- A copy of the approved incorporation document
- The CRI 200 signature page
- Signed bylaws
- The determination letter from the IRS or a copy of the 1023 form
The fee for the New Jersey charity registration is $30.00.
With the incorporation and charity registration completed, a NJ 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 but 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, lays out its 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 its determination letter from the IRS. The department that receives it is still the same (the New Jersey Division of Taxation), but the application is different. It is not written in a letter format, as there is a pre existing form that already exists.
As with the income tax exemption form, there is no filing fee associated with the sales tax exemption. Although form 1023—or the 501(c)(3) application—can technically be filed after incorporation, some nonprofits in NJ like to wait until their state filings are completed.
For NJ charities specifically, the charity registration and income tax exemption form can be submitted before or at the same time as the 501(c)(3) application.
Get Your NJ 501(c)(3)
The 501(c)(3) 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 toward the end of the 501(c)(3) application. In any case, NJ 501(c)(3) organizations are required to submit a copy of their signed bylaws, signed Conflict of Interest Policy, and approved incorporation document when mailing in their 501(c)(3) application. The $600 IRS filing fee is also required.
If you are interested in applying for NJ 501(c)(3) status on behalf of a nonprofit, do not hesitate to contact CharityNet USA. We work closely with NJ charities, and our professionals will make sure all the necessary steps are taken to get you 100% 501(c)(3) approved, which includes taking care of your paperwork for you. Call us today at 407-857-9002, and let us help you start your nonprofit.