9 Steps to Keep Your Nonprofit Compliant
To maintain a 501(c)(3) nonprofit corporation in Washington D.C. you must:
- Apply for exemption from district taxes
- File Annual Federal Returns for Tax-exempt organizations
- Maintain a Registered Agent
- File periodic reports
- Pay the Washington D.C. Franchise Tax
- Apply for permits and licenses
- Renew Charitable Registration
- Register with the Department of Employment Services
- Comply with Public Inspection Rules
1. Apply for exemption from district taxes
District income tax exemption
Once your organization receives your 501(c) determination letter from the IRS, you can then file for district income, franchise, property, and sales tax exemptions by using form FR-164, which can be found after logging in to the MyTax.DC.gov website. If you need additional assistance, visit the Office of Tax and Revenue's Exempt Organizations page.
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 Washington D.C. If your registered agent, or their office address, changes, you must file RA-3 with the Department of Consumer and Regulatory Affairs so that your Articles of Incorporation may be updated.
If you fail to notify the Department of Consumer and Regulatory Affairs of this change, your corporation may be subject to termination.
4. File Periodic Reports
The Washington D.C. Department of Consumer and Regulatory Affairs requires nonprofits to submit an initial report by April 1st the year after the nonprofit becomes incorporated. After the initial report, subsequent reports will be due every two years. Your Registered Agent will receive a copy of the annual report for you to complete, but you may also complete your report online.
Failure to file the appropriate reports may subject your organization to termination.
5. Pay the Washington D.C. Franchise Tax
Unless your nonprofit requests and obtains an exemption, you will need to pay the Washington D.C. Franchise Tax.
6. Apply for Permits and Licenses
Washington D.C. nonprofits need to obtain the appropriate business license in order to operate. You’ll need to apply for a general business license or a charitable solicitation license.
- General Business License: If your organization will not be soliciting charitable contributions from members of the public, you can apply for a general business license online with the Department of Consumer and Regulatory Affairs.
- Charitable Solicitation License: If your organization will be applying for grants or plans to solicit contributions from members of the public, you can apply for the charitable solicitation license online with the Department of Consumer and Regulatory Affairs.
Contact the Department of Consumer and Regulatory Affairs for more information about business licensing:
Department of Consumer and Regulatory Affairs
1100 4th Street, SW,
Washington, DC 20024
Phone: (202) 442-4400
Fax: (202) 442-9445
TTY: (202) 123-4567
7. Renew Charitable Registration
Charitable Washington D.C. nonprofits who have obtained a Charitable Solicitation License will need to renew the license once every two years. Contact the Department of Consumer and Regulatory Affairs for more information about the due date for your organization’s renewal.
8. Register with Washington D.C. Department of Employment Services
If your nonprofit will have employees you will need to register with the Washington D.C. Department of Employment Services, 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 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 more about forming a nonprofit, check out our How to Start a Nonprofit in Washington D.C. guide.