To maintain a 501(c)(3) nonprofit corporation in Delaware:
- Apply for exemption from state taxes
- File Annual Federal Returns for Tax-exempt organizations
- Maintain a Registered Agent
- File periodic reports
- Pay the Delaware Franchise Tax
- Apply for permits and licenses
- Charitable Registration
- Register with the Delaware Division of Revenue
- Comply with Public Inspection Rules
1. Apply for exemption from state taxes
State income tax exemption
Once your organization receives your 501(c) determination letter from the IRS, it will automatically be exempt from state income taxes
2. Annual Federal Returns for Tax-exempt organizations
A. Annual Federal Returns
Most tax-exempt nonprofit organizations are required to file an annual return with the IRS (Click here for a list of exceptions).
The annual gross receipt amounts for an organization determine which form should be used to file the annual federal return.
‘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 any questions, contact the IRS at
- (800) 829-3676 (Form related questions)
- (800) 829-1040 (general information)
Q: When is form 990 due?
A: Form 990 is due on the 15th day of the 5th month after the taxable year of the organization comes to an end.
E.g. If the taxable year ends on Dec 31st, form 990 is due on May 15th.
NOTE: If an organization fails to file form 990 for 3 consecutive years, it will automatically lose tax-exempt status.
B. Unrelated Business Income
If an 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 your organization expects 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.
3. Maintain a Registered Agent
Any nonprofit that has incorporated must have a registered agent who has an office address in Delaware. If your registered agent, or their office address, changes, you must file a Certificate of Change of Agent form with the Delaware Division of Corporations so that your Certificate of Incorporation may be updated.
If you fail to notify the Delaware Division of Corporations of this change, your corporation may be subject to termination.
4. File Periodic Reports
The Delaware Division of Corporations requires nonprofit organizations to file annual reports each year. Annual reports can easily be completed online through the Division of Corporations’ website.
Failure to file the appropriate reports may subject your organization to termination.
5. Pay the Delaware Franchise Tax
Every exempt nonprofit that operates in Delaware is also exempt from paying state Franchise Taxes.
6. Apply for Permits and Licenses
As a Delaware nonprofit, when you fill out the consolidated business and tax registration form, you’ll also be registered for any applicable business licenses as well.
However, if you plan to host/run charitable gaming of any kind, including raffles or bingo, you’ll need to get a separate permit for each event. The Delaware Board of Charitable Gaming issues these permits. Access their website to learn more.
7. Charitable Registration
In the state of Delaware, charitable nonprofits are not required to register in order to solicit charitable contributions.
8. Register with Delaware Division of Revenue
If your nonprofit will have employees you need to register with the Delaware Division of Revenue if you haven’t done so already.
9. Comply with Public Inspection Rules
To comply with federal regulations regarding 501(c)(3) charities, you will need to release the following documents to any member of the public that requests them:
- Your organization’s annual returns for up to 3 years after the listed due date (including the following Forms: 990-PF, 990-EZ, 990-T, and 990)
- Any supporting documents and attachments for the above 990 forms. However, you only need to include the nature of the contribution and the amount contributed for Schedule B.
- Official IRS paperwork showing your organization is considered to be tax-exempt.
- Your organization’s application for exemption and all supporting documents submitted with your application (including Form 1023).
Your organization does NOT need to share the following documents and information with members of the public:
- Any portion of Form 990/990-EZ’s Schedule B that identify who contributors are.
- Anything considered to be an unfavorable ruling, which can include previous denials of tax-exempt status.
- Any additional information permitted to be withheld by the IRS, including things such as trade secrets, patents, etc.
Recommended: Inform your employees about their rights and stay compliant by posting labor law posters in your workplace.
Q: Can I charge members of the public for copies?
A: Yes, you are permitted to request a reasonable amount to procure copies of requested documents.
Q: If requested, how much time do we have to produce the documents?
A: It is ideal to produce these documents within the same working day. However, if your nonprofit has limited office hours due to the time of year, or you don’t have a physical office at all, you should produce the documents within 14 days.
Q: Do I actually need to provide physical copies of the requested documents?
A: If a member of the public as for copies of documents, whether in writing or in person, you are required to make them available.
NOTE: We recommend that nonprofits make these documents available on their website. That way, anyone who might request copies of these documents can simply head to your website to view and/or download them. This will help your organization remain compliant and save time dealing with these requests personally.
To learn more about forming a nonprofit, check out our How to Start a Nonprofit in Delaware guide.