Most Maine nonprofit corporations must file either an Application for Exemption or a Registration Statement with the Department of Professional and Financial Regulation. 9 M.R.S.A. § 5001 et seq. Unless the corporation falls within any of the exemption listed below, it must file registration statement needs to obtain a license from the Department of Professional and Financial Regulation. There is an annual registration fee of $20 and a one-time application fee of $20. The registration applications may be downloaded from the Department’s website. The application must include a Form 990, 990-EZ or 990-N and an audited financial report, if one exists, or a balance sheet identifying assets and liabilities and an income statement identifying revenues and expenditures. For further assistance you may call the Department’s Licensure Division at 207-624-8603.
Under 5 M.R.S.A. § 5006, the following corporations are exempt from the registration requirement and do not need to file anything in Maine:
A variety of requirements apply to the work of professional fundraisers. First off, professional fundraisers must be licensed with the Maine Department of Professional and Financial Regulation, Office of Licensing and Registration. Make sure that any fundraiser your corporation is considering hiring has obtained this license.
In addition, a charity’s agreement to hire a professional fundraiser must be executed in writing and retained in the charity’s office for a period of at least three years. Although additional requirements, such as an annual report, pertain to the professional fundraiser, it is useful for the charity to have a basic understanding of these requirements, so as to avoid any problems if a donation is challenged down the road.
Every nonprofit corporation must obtain a federal Employer Identification Number (EIN). This is simply a means of identifying the organization for tax and other purposes. Corporations may apply online for an EIN (link). You can also request an EIN by calling (800) 829-4933. The call may take anywhere from 15 minutes during off-peak times to over an hour during peak times.
To apply for recognition of tax-exempt status, the corporation must file Form 1023 or 1023-EZ application for a determination letter. The 1023-EZ is a streamlined version that is available to certain smaller organizations generally having less than $50,000 per year in revenue, along with other requirements. The fee for submitting Form 1023 is $600, and the fee for the 1023-EZ is $275. Even if your corporation is not required to apply for 501(c)(3) status (e.g., if its annual gross receipts are below $5,000), it is nevertheless recommended, as many funding sources will only contribute to recognized 501(c)(3) organizations.
Annual information return for exempt organizations. If your organization has more than $50,000 in revenue during your tax year, it must file Form 990. You might also qualify to file Form 990-EZ, which is a simplified version generally used by organizations with gross receipts normally less than $200,000 and assets under $500,000. If your organization is a private foundation, it should file Form 990-PF. The forms are generally due by May 15 if the organization’s fiscal year ends on December 31, although two three-month extensions are generally available if requested on time. All of these forms can be downloaded from www.irs.gov. If the organization averages below $50,000 in revenue, it must file the online Form 990-N.
Election to Make Expenditures to Influence Legislation. Although not a requirement, it is often a good idea for your organization to file Form 5768, especially if you intend to engage in lobbying of federal, state, or local government officials.
Federal Nonprofit Mailing Permit. This permit qualifies your organization for lower rates on bulk mailings. Note that it will be worthwhile only if your organization expects to make regular mailings to more than 200 recipients. Forms are available at most big post offices or online.
An organization must file an IRS 1099-MISC whenever it pays a person $600 or more in a fiscal year for: (1) rents; (2) royalties; (3) commissions and fees; (4) prizes and awards (nonemployees); and (5) other income. If an organization pays a nonemployee more than $600 in a fiscal year, it must file an IRS Form 1099-NEC.
A corporation with one or more employees must pay certain federal payroll taxes and make federal and state withholdings on employees’ wages. Among the necessary forms are the W-2/W-3 and the quarterly IRS Form 941.
Disclaimer: This information is provided for educational purposes only and is not intended to be legal advice. Individuals and groups are encouraged to retain the services of a licensed attorney to help them with specific issues.