
Guide to NPO Formation and Tax Exemption in Illinois
"Learn the essentials of establishing a Not-for-Profit Organization (NPO) in Illinois, including acquiring an EIN, attaining tax-exempt status, and understanding the distinctions between NPO and tax-exempt designations. Explore the advantages and disadvantages of being a NPO and a tax-exempt organization, and discover key considerations for clubs and districts seeking nonprofit status."
Download Presentation

Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Get on the Yellow Brick Road to becoming a NPO (Not-for-Profit Organization)
Questions Questions 1. Does your club have an Employer Identification Number (EIN)? 2. Is your club incorporated in Illinois as a Not-for-Profit? 3. Is your club federally tax exempt (501c3)?
What is an Employer Identification Number (EIN)? (aka Federal Employer Identification Number (FEIN)) An employer identification number is a nine-digit number the IRS assigns for tax filing and reporting purposes (example 36-1234567). Apply for an EIN in various ways (online, fax, mail). It is FREE. www.irs.gov/businesses/small-businesses-self-employed/apply-for-an- employer-identification-number-ein-online GFWC s website has instructions in the index under M Building New Clubs, Part 3 Fill out Form SS-4 before applying on-line (Application for Employer Identification Number) 9a Type of Entity Mark the box Other nonprofit organization
Non-Profit vs Tax Exempt Non-Profit A State grants Non-Profit Status In Illinois, this is referred to as Not-For-Profit Status Tax Exempt The IRS grants tax-exempt 501c3 status
GFWC Illinois is a Not-For-Profit/Tax-exempt Organization GFWC-IL does not pay Federal or State income tax on monies collected. GFWC-Illinois has Not-for-Profit Status (State) GFWC-Illinois has 501c3 Status (Federal) GFWC-Illinois does NOT have: Illinois Sales Tax Exempt Status (State)
Illinois Clubs and Districts are NOT covered under GFWC-IL Not-for-Profit status or the GFWC-IL 501c3 status. Clubs cannot use their District s Not-for-Profit status or the District s 501c3 status. Districts cannot use its Clubs Not-for-Profit status or its Clubs 501c3 status Every club and district needs to apply for these on its OWN.
What are the Advantages and Disadvantages to being a Non-Profit and a Tax-Exempt Organization? Advantages: Exempt from Income Tax Separate entity status Limited liability protection Access to grants Credibility Perpetual existence Tax Deductible donations Disadvantages: Expenses filing fees File tax returns File annual state reports Maintain Bylaws Retain books and records Management oversight No lobbying/political campaigning
How to Form an Illinois Not-For-Profit A Guide for Organizing Not-For-Profit Corporation in Illinoisin https://www.ilsos.gov/publications/pdf_publications/c165.pdf Apply for Articles of Incorporation - EIN# - Copy of Bylaws - Registered agent and a registered office in Illinois is required - Actual address needed Not a PO Box - Must have a minimum of 3 directors - Fee: $50 - Can apply on-line or by mail Online instructions and application: https://www.ilsos.gov/departments/business_services/incorporation/nfp_instructions.html Organizations should also contact their County Clerk's office to inquire as to any necessary filings. Many local, city, and county agencies require that the Stamped Articles of Incorporation be filed with them as well for an additional fee. *Annual Reporting Required with $10 fee *
Register with the Illinois Attorney Generals Office This is required for any charity holding or soliciting funds in Illinois. https://www.illinoisattorneygeneral.gov/charities/index.html - Listing of Club Officers - Fee: $15 - Not available online snail mail only Complete Form CO-1 (>1 year old) or CO-2 (<1 year old) - EIN# WARNING: If your club has been in existence longer than 1 year and did not file with the Attorney General s office when your club was formed, it is an automatic minimum $200 penalty. The Attorney General's Charitable Advisory Council recommends the following document as a guide for governance, management and legal compliance for Illinois nonprofits. https://myforefront.org/wp-content/uploads/2019/09/Nonprofit-Best-Practices-2020.pdf *Annual Reporting Required*
How to Apply for a 501c3 Must complete Form 1023-EZ Eligibility Worksheet to determine if you can file Form 1023-EZ. Any YES answer requires the organization to file Form 1023 Must apply on-line To file Form 1023-EZ, you need: - EIN# - Articles of Incorporation - Use NTEE code: S81 Woman s Clubs - Pay.gov account to pay filing fee - Filing Fee: $275 Resources IRS website: https://www.irs.gov/charities-and-nonprofits IRS Publication 557, Tax Exempt Status For Your Organization IRSPublication 4220, Applying for 501(c)(3) Tax-Exempt Status *Annual Reporting Requirement*
Summary Illinois Not-For-Profit Secretary of State - Articles of Incorporation Illinois Attorney General s Office Charitable Organization Registration Statement Internal Revenue Service Apply for an Employer Identification Number (EIN) File Form 1023-EZ to become a 501c3 Note no do overs! Forms must be completed or they will be rejected. Non-Profit Tax-Exempt Organization s information is always public knowledge.
Lisa Flanigan 630-742-4394 lflanigan.gfwc@gmail.com