8 Steps to Keep Your Nonprofit Compliant
To maintain a 501(c)(3) nonprofit corporation in Virginia you must:
- Apply for exemption from state taxes
- File Annual Federal Returns for Tax-exempt organizations
- Maintain a Registered Agent
- File periodic reports
- Apply for permits and licenses
- Register/Renew Charitable Registration
- Register with Virginia Department of Taxation and Virginia Employment Commission
- Comply with Public Inspection Rules
1. Apply for exemption from state taxes
A. State income tax exemption
Once your organization receives your 501(c) determination letter from the IRS, your nonprofit will automatically be exempt from paying state income taxes. You do not need to fill out any additional paperwork to be eligible for this exemption.
B. State sales tax exemption
Some nonprofits are eligible for sales and use tax exemptions, but must meet strict requirements. If you’re eligible to apply for a sales tax exemption, access the Virginia Tax website and register your nonprofit.
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 Virginia. If your registered agent, or their office address, changes, you must file Form SCC635/834 with the State Corporation Commission so that your Articles of Incorporation may be updated. If you prefer to fill out a form and mail it in, you can request the SCC to send you a copy of the form on this page.
If you fail to notify the State Corporation Commision of this change, your corporation may be subject to termination.
4. File Periodic Reports
The Virginia State Corporation Commission will send an annual report notice to your nonprofit’s registered office and will provide details on when your annual report is due.
If your nonprofit hasn’t changed its director or officer information, then you may complete your annual report online. If you have made changes to this information, or you prefer to have a form mailed to you, you may request an annual report form.
Failure to file the appropriate reports may subject your organization to termination.
5. Apply for Permits and Licenses
The majority of Virginia nonprofits will not need a general business license of any kind. You may want to check with your local clerk’s office to determine if there are any county or city-level requirements.
6. Register/Renew Charitable Registration
Charitable Virginia who solicit contributions must register with the Virginia Department of Agriculture and Consumer Services. You will need to renew this registration each year to remain compliant.
To register, you will need to send the following documents to the Virginia Department of Agriculture and Consumer Services:
- Form 102
- Articles of Incorporation
- Your current 990 Form
- Your IRS determination letter
- A copy of each contract you have with professional solicitors
- A list of your directors, officers, and principal executive officer
Mail copies of these documents to:
Virginia Department of Agriculture and Consumer Services
P.O. Box 536
Richmond, VA 23218-0526
Information: (804) 786-1343
7. Register with Virginia Department of Taxation and Virginia Employment Commission
If your nonprofit will have employees, you will need to register with the Virginia Department of Taxation and the Virginia Employment Commission. You can register with both entities online for the employer withholding and unemployment insurance taxes.
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 Virginia guide.