Most nonprofits are 501(c)(3) organizations, which means they are formed for religious, charitable, scientific, literary, or educational purposes and are eligible for federal and state tax exemptions. To create a 501(c)(3) tax-exempt organization, first you need to form a Nevada nonprofit corporation. Then you apply for tax-exempt status from the IRS. Here are the details.
First, you will need to create your nonprofit corporation under state law.
Your nonprofit corporation must have at least one director, and all directors on the board must be at least 18 years old. In addition, under Nevada state law, you must file a list of your nonprofit’s officers and directors and your registered agent within one month of filing your articles of incorporation and then annually thereafter.
The name of your nonprofit corporation must be distinguishable from the names of all other business entities on file with the Nevada Secretary of State. In addition, you cannot use a name that appears to be a person’s natural name unless you include additional words such as “Incorporated,” “Inc.,” “Limited,” or something that shows it is not a person. There are also restrictions on the use of certain words in names including “trust,” “engineer,” and “architect.” For more on these and other name restrictions, see NRS 82.106, NRS 82.086, and NRS 82.096.
To see if your proposed name is available, you can search Nevada's name database on the Secretary of State’s website.
You will need to create and file nonprofit articles of incorporation with the Nevada Secretary of State’s office. As of May 2020, the filing fee is $50. The Secretary of State has a sample nonprofit articles of incorporation form on its website which you can use to create your Nevada nonprofit corporation. The articles form includes the minimal information needed to create a nonprofit corporation in Nevada. You must provide:
The articles form on the Secretary of State’s website does not include certain language required by the IRS to obtain your federal tax-exempt status. To ensure you get 501(c)(3) tax-exempt status from the IRS, you will need to have additional specific language in your articles including:
For more information on IRS requirements for tax exemption, including sample articles provisions, see IRS Publication 557, Tax-Exempt Status for Your Organization, on the IRS website.
Follow the instructions on the Secretary of State’s website for completing and filing your nonprofit articles of incorporation. Be sure to include the additional language required by the IRS for 501(c)(3) tax-exempt status.
You'll need to prepare bylaws that comply with Nevada law and contain the rules and procedures your corporation will follow for holding meetings, electing officers and directors, and taking care of other corporate formalities required in Nevada. Your bylaws do not need to be filed with the Nevada Secretary of State -- they are your internal operating manual.
For more information, see Nolo's article Nonprofit Formation Documents: Articles of incorporation, Bylaws, and Organizational Minutes. For help creating your bylaws, see Nolo's book How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo).
Your first board meeting is usually referred to as the organizational meeting of the board. The board should take such actions as:
Be sure to keep minutes that accurately record your board’s actions. You should set up a corporate records binder for your nonprofit to hold important documents such as articles of incorporation, bylaws, and minutes of meetings. For more information, as well as minutes forms, consent forms, and other resolutions, see Nonprofit Meetings, Minutes & Records, by Anthony Mancuso (Nolo).
An EIN is a unique federal tax identification number assigned by the IRS. You must have an EIN before you can submit the paperwork for 501(c)(3) status. You may submit the free application online via the IRS website.
All Nevada nonprofits must file an Initial/Annual List of Officers and Directors, which serves as your state business license application. If you plan on soliciting donations, you must also file a Charitable Solicitation Registration Statement with the Secretary of State. Depending on the type of nonprofit and your city, you might need to apply for additional business licenses. Consult with your town's business license division to determine which, if any, licenses you must obtain.
Now that you have created your nonprofit corporation, you can obtain your federal and Nevada state tax exemptions. Here are the steps you must take to obtain your tax-exempt status:
To obtain federal tax-exempt status from the IRS, you will need to complete and file IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. This long and detailed form asks for lots of information about your organization, including its history, finances, organizational structure, governance policies, operations, activities, and more. For line-by-line instructions on how to complete the Form 1023, see How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo).
Smaller nonprofits may be eligible to file Form 1023-EZ, Streamlined Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. This is a much simpler, shorter form that is filed online. Only smaller nonprofits--those with projected annual gross receipts of less than $50,000 and total assets of less than $250,000--are eligible to use the streamlined 1023-EZ application.
See the IRS website for more information on the Form 1023 and Form 1023-EZ filing requirements.
Nevada does not have a corporate income tax so you will not be subject to any state income tax. Check with the Nevada Department of Taxation to find out whether you qualify for sales and use state tax exemptions.