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Applying for a 501c3 in Texas

Applying for 501c3 approval may seem like a daunting task for a freshly formed nonprofit organization. If the approval itself is not intimidating enough, then the 501c3 application should finish the job nicely. Rather than feel discouraged or put off by the paperwork, the best course of action for a nonprofit would be to familiarize themselves with the forms that are needed in the 501c3 application process. Granted, the forms in question are not necessarily ones that are filed with the 501c3 application to the IRS. The majority of the forms are actually filed with the state, rather than the IRS. Knowing which ones go where can save a nonprofit a lot of wasted time. Specifically, knowing which forms are necessary when incorporating your nonprofit in Texas can get your organization off the ground much faster.

Preliminary Documents Are First

Before you can start diving into the forms that need to be filed with the state, you should look into making sure that you have all nonprofit housekeeping done. This includes putting together your Bylaws and Conflict of Interest Policy and making sure they accurately convey your rules, officer positions, voting procedures, and core values. All board members must sign the Bylaws and Conflict of Interest policy; the signatures have to be original and not digital or typed in. After creating a set of Bylaws and a Conflict of Interest Policy, a nonprofit does not need to send them anywhere straight away. The two documents will be used as supporting documents for other forms, such as the 501c3 application itself.

Incorporating In The State

The first document that must be filed with the state in Texas is a nonprofit’s incorporation document. You cannot file anything else, with the state or the IRS, without incorporating first. Think of it as putting the first puzzle piece into play. The Articles of Incorporation, known in Texas as the ‘Certificate of Formation Nonprofit Corporation’, must be filed with the Secretary of State. The filing fee for a nonprofit incorporation is $25.00. Processing time varies due to the volume of applications that the Secretary of State is receiving at the time, but you can expect to be waiting at least two to three weeks. Were it a different state, the next step in the filing process would be to file the charity registration. However, under Texas law most nonprofit organizations are not required to register with the state. This deviates from most states, where filing a charity registration is mandatory if a nonprofit organization wishes to solicit for donations. The only exception to the charity registration being required in Texas is if the organization deals with law enforcement, public safety, or veterans organizations. If your nonprofit falls into one of these categories then it must register with the Office of the Attorney General or the Texas Secretary of State to ensure they are in compliance with the state. If your nonprofit does not fall into the categories, then that is one less thing to worry about when applying for a 501c3 in Texas.

State Tax Exemption

The last document to be filed with the state, though only AFTER a nonprofit receives their determination letter from the IRS, is the state tax exemption application. This form is known in Texas as the “Texas Application for Exemption – Federal and All Others”. It is a short and sweet form, but it is necessary to ensure that the nonprofit is exempt from state taxes. A copy of the IRS determination letter must be included when submitting the state tax exemption form, to serve as proof that the nonprofit has been awarded 501c3 approval. Both documents should be filed with the Comptroller of Public Accounts, specifically their Exempt Organizations Section. There is no filing fee associated with the filing.

Check All The Right Boxes

The 501c3 application is the only application that does not have a ‘Texas twist’ to it. The filing of the 501c3 application is more or less the same for each state, yet a nonprofit should still make sure they are filling out the form correctly. One wrong check or blank answer can result in rejection from the IRS, which can be very frustrating after a 6 to 8 processing time. A nonprofit should look into the different schedules a 501c3 application offers, especially if the nonprofit is a church, school, or hospital. Nonprofit organizations of that caliber must provide additional information by filling out the aforementioned schedules, which are located towards the back of the application.

Wrapping It All Up

In addition to submitting the completed 501c3 application to the IRS, there are supporting documents that must also be sent along. This includes: a signed copy of the Bylaws, signed copy of the Conflict of Interest Policy, and a filed copy of the nonprofit’s incorporation. Last but not least, a nonprofit must include the $600 filing fee, paid by check to the United States Treasury.   If you are a nonprofit organization who wishes to incorporate and apply for 501c3 approval in Texas, 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.