How to keep your Montana Nonprofit Compliant

Once you form a 501(c)(3) Nonprofit Public Charity in Montana, follow this guide to keep it in good standing.

(To learn about forming a nonprofit, check out our How to Start a Nonprofit in Montana guide.)


1. Apply for exemption from state taxes

A. State income tax exemption

Once your organization receives your 501(c) determination letter from the IRS, you can then file for state income tax exemptions by using form EXPT.


B. State property tax exemption

Some Montana nonprofits may be eligible for a property tax exemption. To learn more, and to access the application, review the Montana Department of Revenue’s website.

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 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, contact the IRS at

  • (800) 829-3676 (Form related questions)
  • (800) 829-1040 (general information)

FAQ

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 Montana. If your registered agent, or their office address, changes, you must notify the Secretary of State so that your Articles of Incorporation may be updated. You can update your Registered Agent or Registered Office information online, through the Secretary of State’s website.

If you fail to notify the Secretary of State of this change, your corporation may be subject to termination.

4. File Periodic Reports

The Montana Secretary of State requires nonprofits to submit an annual report each year by April 15th. This report may be filed online through the Secretary of State’s website.

Failure to file the appropriate reports may subject your organization to termination.

5. Apply for Permits and Licenses

The majority of Montana nonprofits will not need a state-level business license. You may want to check with your city or county clerk to determine if there are local requirements you must follow.

If your nonprofit plans to host charitable games like raffles or bingo, it will most likely need to obtain a gambling license through the Montana Department of Justice. Access their website to learn more about gambling licenses and to find application forms.

6. Employees

If your nonprofit will have employees, you must register with the Montana Department of Revenue and the Montana Department of Labor and Industry.

You can easily register for an employer withholding account with the Montana Department of Revenue online. You may also register for an unemployment insurance tax account with the Montana Department of Labor and Industry online as well.

7. 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.

FAQ

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 Montana guide.

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