To maintain a 501(c)(3) nonprofit corporation in Kentucky you must:
1. Apply for exemption from state taxes
A. State income tax exemption
Once your organization receives your 501(c) determination letter from the IRS, it will automatically be exempt from corporate income taxes.
B. State sales tax exemption
To apply for a sales tax exemption, fill out form 51A125 and mail a copy of your Articles of Incorporation and IRS Determination letter to:
Division of Sales and Use Tax
Department of Revenue
P.O. Box 1274
Frankfort, Kentucky 40602-1274
Phone: (502) 564-5170
Web Site: revenue.ky.gov/business
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 (Check the IRS website 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 Kentucky. If your registered agent, or their office address, changes, you must file Form RAC with the Secretary of State so that your Certificate of Formation may be updated.
If you fail to notify the Secretary of State of this change, your corporation may be subject to termination.
4. File Periodic Reports
The Kentucky Secretary of State requires nonprofits to submit an annual report by June 30th of each year. These reports can be filed online, via mail (by printing the annual report form from their online portal), or by completing the annual report postcard sent to your organization via USPS.
Keep in mind that your annual report cannot be used to make changes to your registered agent, registered office, or principal office - you must use the Statement of Change forms for these purposes.
Failure to file the appropriate reports may subject your organization to termination.
5. Apply for Permits and Licenses
In the Commonwealth of Kentucky, business licenses are managed by local counties and cities. To determine if your organization needs to obtain a business license, you can contact your local government officials and review Kentucky’s One Stop Business Portal to access state-level links to various permits and licensing requirements.
6. Register/Renew Charitable Registration
Charitable Kentucky nonprofits are required to register with the Attorney General and will need to renew their registration each year.
For the initial registration you must submit the following to the Attorney General:
- A copy of your IRS determination letter
- A copy of your Articles of Incorporation
- A copy of your By-laws
- A copy of your most-recent IRS 990 form OR if you haven’t filed a 990 yet, a Unified Registration Statement (URS)
These documents can be mailed to the Attorney General at:
Office of the Attorney General
1024 Capital Center Drive, Suite 200
Frankfort, KY 40601
Attn: Charity Registration
To renew your charitable registration, you will need to submit a copy of your IRS 990 form to the address above each year.
To learn more about these requirements, access the Attorney General’s website.
If your nonprofit will have employees, you will need to register with the Kentucky Department of Taxation and the Kentucky Office of Employment and Training.
Register with the Kentucky Department of Taxation for an employer withholding account through their website or by mailing in Form 10A100. You can also register with the Kentucky Office of Employment and Training through their website.
To learn more about employer responsibility in regards to the Kentucky Income Tax, access their information packet for employers.
8. 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 identifies 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 asks 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 about forming a nonprofit, check out our How to Start a Nonprofit in Kentucky guide.