If you are starting a 501(c)(3) nonprofit in Massachusetts, you have come to the right place. After following the easy steps for Massachusetts nonprofit formation, follow this guide to help keep your Massachusetts nonprofit compliant and protected.
In this guide we cover:
How to Protect Your Massachusetts Nonprofit
Get Business Insurance
As with any other business, there may be risks involved in running the nonprofit. Getting insurance for your nonprofit allows you to focus on your passion while minimizing your liability.
Here are some of the common types of insurance you may want to consider for your organization:
- General Liability Coverage
- Directors and Officers Coverage
- Social Service Professional Coverage
Your coverage needs will vary based on your organization and the work you do.
Properly Sign Legal Documents
There will be times when you will be signing a document on behalf of your nonprofit. It is important that these times are easily distinguishable from when you are signing a document as an individual. If a document isn’t properly signed, you might suddenly find yourself personally responsible for something the organization should have been liable for.
To avoid such confusion we recommend you and all the members of your organization follow the following format:
- The official name of your nonprofit
- Your signature
- Your full legal name
- Your position in the organization
How to Keep Your Massachusetts Nonprofit Compliant
Register with the Attorney General
All nonprofits in the state of Massachusetts, regardless of their purpose, are required to apply to register as a charity. Once registered with the Attorney General’s Office, your organization can legally conduct business.
For this application you will need:
- The Articles of Organization
- List of the current officers/directors and their addresses
- Copy of the bylaws
- IRS letter designating it as 501(c)(3) tax-exempt organization (if applicable)
The application must be sent to:
Office of the Attorney General
Non-Profit Organizations/Public Charities Division
One Ashburton Place
Boston, MA 02108
With a filing fee of $100.
If your organization has solicited for donations in the past or intends to solicit for donations in the future, you will also need to fill out and send Schedule A-2 with an additional $50 fee.
For more information, you can contact the Attorney General’s office at:
Determine Massachusetts Business Permits and Licenses
Business licenses in the state of Massachusetts are regulated by individual counties and cities. Contact your local city clerk’s office to find the requirements for your organization in your area.
You can also use the Small Business Administration’s Business License & Permit Lookup tool.
File Required Periodic Reports
Your nonprofit is required to file an annual report by the 1st of November of each year with the Secretary of the Commonwealth’s office.
You can opt to mail or form or file it online.
Failing to file the annual report for two consecutive years may result in the administrative dissolution of your organization.
If your organization will have employees you must register with the Massachusetts Division of Unemployment Assistance and the Massachusetts Department of Revenue.
You can file with the Massachusetts Division of Unemployment Assistance online or contact them at:
Massachusetts Division of Unemployment Assistance
Charles F. Hurley Building
19 Staniford Street
Boston, MA 02114
You can refer to the Massachusetts Employer's Guide to Unemployment Insurance for additional information.
You can file with the Massachusetts Department of Revenue online or contact them at:
Department of Revenue
Data Integration Bureau
P.O. Box 7022
Boston, MA 02204
Information & Forms: (617) 887-6960
Public Inspection Rules for all 501(c)(3) Organizations
All organizations that have been granted the 501(c)(3) status are required to disclose the following documents to the public when requested:
- Annual returns for 3 years after the due date (this includes returns like Form 990, 990-EZ, 990-PF, and any Forms 990-T)
- All Form 990 Schedules (except portions of Schedule B), attachments and supporting documents.
- Application of exemption and all supporting documents such as Form 1023
- The official paperwork from the IRS that shows that your organization has tax-exempt status.
The following do NOT need to be shared with the public
- Portions of schedule B of Form 990/990-EZ that identify the contributors. (You only need to disclose the amount contributed and the nature of the contributions)
- Any unfavorable rulings such as an earlier denial of tax-exempt status.
- Any information the IRS has said you can withhold. This may include things like sensitive patents and trade secrets.
How long do I have to produce these documents if requested?
Ideally within the same day. If your organization doesn’t have an office or maintains limited hours during parts of the year, the information should be made available within two weeks.
Do I need to provide copies of the documents?
If someone asks for copies in person or in writing you must provide them with copies.
Can I charge for copies?
You can charge a reasonable amount for making copies of the documents requested.
NOTE: It may be easiest to have the documents available on your website so that anyone who requests copies can be sent to the site. This allows you to stay compliant without having to spend a lot of time dealing with document requests.
Annual Returns for Tax-Exempt Organizations
Most tax-exempt nonprofit organizations are required to file an annual return with the IRS (Check the list of exceptions).
Which form you should use to file the annual returns depends on the annual gross receipt amounts for your organization.
"Gross receipt" is defined by the IRS as “the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses”
- For gross receipts ≤$50,000 --- File 990-N
- Gross receipts <$200,000 and total assets <$500,000 --- File 990- EZ
- Gross receipts >$200,000 or Total assets >$500,000 --- File 990
For any questions, you can call the IRS at
- (800) 829-3676 (Form-related questions)
- (800) 829-1040 (General information)
When is form 990 due?
You have a little over 4 months after your taxable year comes to an end to file Form 990. It is due on the 15th day of the 5th month. So if your taxable year ends on Dec 31st, your form 990 is due on May 15th.
NOTE: If your organization fails to file form 990 for 3 consecutive years, it will automatically lose its tax-exempt status.
Report Unrelated Business Income
If your Texas organization has a gross income of ≥$1000 from a trade or business that is not related to the stated purpose of the organization, then it must file Form 990-T to pay tax on that income.
If you expect to pay $500 or more for the year in taxes on unrelated business income, your organization must pay a quarterly estimated tax on the unrelated business income using Form 990-W.