Anyone who runs a nonprofit knows that keeping track of the reporting requirements and submission deadlines to the various government agencies that oversee nonprofits in California can seem like a full-time job. Agencies such as the IRS, the California Franchise Tax Board, the California Secretary of State, and the California Attorney General, each have their own unique set of reporting requirements, which most California nonprofits must comply with all or some of to remain in good standing. To help you keep track of everything, below, we highlight four of the most common reporting requirements applicable to California nonprofits, along with some helpful tips for each. However, please keep in mind that there may be other reporting requirements that apply to your organization depending on the nature of your operations, and we recommend working with an accountant and/or a lawyer to fully understand the full scope of your organization’s reporting requirements.
Form 990 Series – Federal Informational Tax Return
Most nonprofit organizations with a federal income tax exemption, including an exemption under Internal Revenue Code section 501(c)(3), must file an annual informational tax return with the IRS using a form in the 990 series, such as 990, 990-EZ, or 990-N. Some organizations are exempt from this requirement, such as churches, and you should consult with an accountant if you believe your organization may be exempt. If not, the type of 990 form your organization will file will depend on your organization’s gross receipts and total assets. The 990 series forms are due every year by the 15th day of the 5th month after the close of an organization’s tax year. For example, if an organization’s tax year ends on December 31st, its Form 990 would be due by May 15th of the following year. Organizations that fail to file their 990 informational returns may be assessed penalties and will automatically lose their federal tax-exempt status if they fail to file their federal informational returns three years in a row.
Form 199 Series – State Informational Tax Return
Organizations that are similarly exempt from state income tax under California law, which includes section 501(c)(3) organizations that have also obtained a state income tax exemption, must file an annual informational state tax return using the Form 199 or Form 199N, sometimes called the 199N e-Postcard. Like their federal counterparts, Forms 199 and 199Ns are also due every year by the 15th day of the 5th month after the close of the organization’s tax year. Additionally, organizations will face penalties for failing to file Form 199 or 199Ns and will automatically lose their state tax-exempt status if they fail to file their 199 or 199Ns three years in a row.
Form CT-1 and Form RRF-1 – Registry of Charitable Trusts
Every charitable corporation, unincorporated association, charitable trustee, and other legal entity holding property for charitable purposes, must file with the California Attorney General an initial registration with the Attorney General’s Registry of Charitable Trusts. Like with the Form 990 Series, some organizations are exempt from this registration requirement, such as educational institutions and religious corporations, and you should consult with an attorney if you believe your organization may be exempt from registering. If not, the initial registration form is the Form CT-1, which is due within 30 days of an organization receiving charitable assets. After registering, an annual renewal form, Form RRF-1, must be submitted to the Attorney General each year. Form RRF-1 is due within 4 months and 15 days of the end of the organization’s fiscal year, unless the IRS grants an extension to the organization on its deadline to file its Form 990 series returns. Failure to submit this Form RRF-1 can result in multiple negative consequences such as monetary penalties, and a delinquent status with the Attorney General, which can impair a charitable organization’s ability to operate and solicit charitable donations until the delinquency is addressed.
Form SI-100 – Statement of Information
Finally, all California nonprofit corporations must file a Statement of Information every other year with the California Secretary of State. An initial statement of information must be filed within 90 days of a nonprofit filing articles of incorporation with the Secretary of State, and then every two years, during the calendar month the articles were filed, but can be filed up to five months in advance. Failure to file the Statement of Information can lead to a loss of good standing within the state, which will impair a nonprofit’s ability to do business.
While keeping up with these reporting obligations can seem like a daunting task, they are essential requirements for operating in good standing and in compliance with the law. For further guidance, organizations should speak with their counsel and their accountants.