Easy Steps To Protect Your New Mexico Nonprofit and Keep Your Nonprofit Compliant

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If you are starting a 501(c)(3) nonprofit in New Mexico, you have come to the right place. After following the easy steps for New Mexico nonprofit formation, follow this guide to help keep your New Mexico nonprofit compliant and protected.

In this guide we cover:

  1. How to Protect Your New Mexico Nonprofit
  2. How to Keep Your New Mexico Nonprofit Compliant

How to Protect Your New Mexico 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 New Mexico Nonprofit Compliant

Maintain A New Mexico Registered Agent

Nonprofits that have incorporated are required to maintain a registered agent with an office address in New Mexico.

If the agent or the office address changes, you must file this update with the Secretary of State to effect a change to the Articles of Incorporation.

Updates to the Registered Agent (and many other updates) can be made online through the Secretary of State’s Online Business Portal.

For more information, you can call the Secretary of State at (800) 477-3632 or visit their office at the address found below:

New Mexico Secretary of State
325 Don Gaspar, Suite 300
Santa Fe, NM 87501

File Required Periodic Reports

Your organization must file two reports at the state level every year:

  1. Annual Report with the New Mexico Secretary of State
  2. Annual Report with the New Mexico Attorney General

1. Annual Report with the New Mexico Secretary of State

Every year, within four and a half months after the end of the fiscal year, your organization must file an annual report with the secretary of state. This can be completed online through the Online Business Portal.

For more information, you can call the Secretary of State at (505) 827-4508, visit them at their website, or visit their office at the address found below:

New Mexico Secretary of State
Corporations Bureau
Chartered Documents Division
325 Don Gaspar, Suite 300
Santa Fe, NM 87501

2. Annual Report with the New Mexico Attorney General

Charitable organizations must file an annual report with the New Mexico attorney general every year within 6 months after the end of the fiscal year. This can be filed online.

For more information, you can call the Office of the Attorney General at (505) 827-6000 or visit them at their website.

Determine New Mexico Business Permits and Licenses

As a nonprofit in the state of New Mexico, your organization will not need a general business license.

You will want to check with your city or municipality to see if there are any local licensing requirements.

If your organization will be conducting charitable gaming (raffles, bingo, etc.), you will need to obtain a charitable gaming license from the State of New Mexico Gaming Control Board.

For more information, you can call the Gaming Control Board at (505) 841-9700 or visit their office at the address found below:

New Mexico Gaming Control Board
4900 Alameda Blvd NE
Albuquerque NM 87113

Employees

If your organization will have employees you must

  1. Register with the New Mexico Department of Workforce Solutions
  2. Register with the New Mexico Taxation and Revenue Department

1. Register with the New Mexico Department of Workforce Solutions

You must register online for unemployment insurance taxes.

For more information, you can call the Department of Workforce Solutions at (505) 841-8576 or visit them at their website.

2. Register with the New Mexico Taxation and Revenue Department

Register online for withholding and workers compensation taxes.

For more information, you can call the Taxation and Revenue Department at (505) 827-0951 or visit them at their website.

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.

FAQ:

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 New Mexico 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.