Plante Moran has information on obtaining Not-For-Profit Status for Michigan. To discuss how you can obtain your Not-For-Profit status, please contact us.
Michigan Nonprofit Organizations Steps Required to Obtain Tax-Exempt Status Under Section 501(C)(3)
- Draft governing documents; most organizations form a Michigan nonprofit corporation by filing Articles of Incorporation with the State. Filing fee to the State: $20.
- Obtain employer identification number by filing Form SS-4 with the IRS. No filing fee.
- Apply for recognition of tax-exempt status by filing Form 1023 with the IRS. Filing fee: $850 for organizations expecting more than $10,000 in annual gross receipts.
- File with the State of Michigan’s Attorney General’s office. There are three possible forms that may be required.
Obtain directors and officers (D&O) insurance. Contact your insurance agent for an up-to-date quote.
Annual reporting requirements include Form 990, Return of Organization Exempt from Income Tax, filed with the IRS, if gross receipts exceed $50,000. Organizations with less than $50,000 in gross receipts should file Form 990-N. No tax liability unless the organization engages in unrelated activities.
Renewal Application for License to Solicit Donations must be filed annually with the Michigan Attorney General’s office if contributions of more than $25,000 are received or anticipated. No filing fee involved.
Michigan Annual Report is filed each October 1 with the Michigan Corporation, Securities and Land Development Bureau. Filing fee: $20.
- Request for Exemption – There are two separate acts that can apply to charitable organizations in the state of Michigan: the Charitable Organizations and Solicitations Act (COSA), which provides oversight of the solicitation of public contributions, and the Supervision of Trustees for Charitable Purposes Act (STCPA), which provides oversight of charitable organizations in general. This form is to be filed by an organization requesting exemption from the filing requirements under either act. The possible exceptions to both acts are listed in detail on the Request for Exemption Form. If an organization is deemed to be exempt from both acts, no additional forms are required. If the organization is only exempt from one of the above, one of the following forms will be required. There is a key in the form that helps determine which additional form is required.
- Initial Application/Registration – This form is to be filed by an organization that is subject to the charitable solicitation licensing rules (generally >$25,000 of contributions from the general public). It serves as the initial License to Solicit application and the charitable registration with the State.
- Charitable Trust Registration Statement – This form is to be filed by an organization that is not subject to the charitable solicitation licensing rules, but is subject to oversight by the AG’s office under the STCPA.
NOTE: Most forms can be obtained from IRS and Michigan web sites, as follows:
Absence of Federal Tax Penalty Protection: The Internal Revenue Service mandates that written advice regarding tax matters meet very detailed and comprehensive requirements before it can be relied upon by a taxpayer to avoid penalties that might apply if the tax benefits or results discussed in the document are disallowed. Compliance with these rigorous standards
and requirements exceeds the scope of this engagement. Consequently, the analysis and advice contained in this document regarding federal tax matters is not intended to be used, and may not be relied upon by you, for the purpose of avoiding any federal tax penalty.