Legal Reporting Requirements for Nonprofits
The beginning of the year serves as a good time to review your processes and procedures to assure that you meet all the legal reporting requirements for your nonprofit. Ultimately, your board retains responsibility for assuring that the organization meets its legal requirements, but many board members rely on staff for these specifics so you will likely have to take the lead in educating your board.
Because these requirements vary by state, check with your accountant, attorney, and state requirements to assure that you have filed everything you need to file and file them on time. Often you can find them listed under your state’s Secretary of State or Attorney General website.
Every nonprofit, regardless of location, must file a 990, your annual tax return, with the IRS. Even though nonprofits do not pay income taxes, you still must file the form which the IRS uses to gather information about tax-exempt organizations, educate organizations about tax law requirements, and promote compliance. It also helps you share information with the public about your programs and helps states regulate the charities in their state. Which version of the 990 form you need to file depends on your assets and annual budget.
Most nonprofits reading this likely exist in Iowa or Illinois so I’ll highlight those states’ requirements to give you a feel for the types of requirements that your state may have.
Illinois nonprofits must file the Illinois Charitable Organization Registration Statement (Form CO-1) and AG990-IL forms each year with the Attorney General. Note that as of January 1, 2024, Illinois changed the dollar amounts for the contribution thresholds that require an Audit or a Review of Financial Statement get included with the annual report. Review the website for details.
Iowa nonprofits must file a Biannual Report with the Secretary of State by April 1 in odd years. A link to this form and all other forms for the Secretary of State live on its website. For more information about reporting requirements for Iowa nonprofits, you can also visit the Larned A. Waterman Nonprofit Resource Center.
When you file your annual reports, you might double check your state’s website to assure that you have filed all of the necessary forms when you started your nonprofit or had a material change as the websites have those listed as well. Failure to comply may result in a fine and may lose you the opportunity to apply for some public grant funds.
I am neither an accountant nor lawyer; this information comes from my experience and research. Please consult your professional advisors to ensure that you meet all the necessary requirements for your state. And make a note for next year so you don’t have to do all this research again!
