How to Apply for Nonprofit Status in New York State

By Stephanie Kurose, J.D.

How to Apply for Nonprofit Status in New York State

By Stephanie Kurose, J.D.

If an organization obtains nonprofit status in New York state, they are eligible for federal and state tax exemptions. Most nonprofits form as a 501(c)(3) organization, which include religious, charitable, scientific, literary, or educational. Nonprofits in New York cannot be formed for profit or other financial gain. In addition, no corporate members, directors, or officers can obtain corporate assets, income, or profit unless permitted by state law.

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Forming a New York Nonprofit Corporation

Before you can apply for tax-exempt status, you must first form a nonprofit corporationin compliance with New York's Not-for-Profit Corporation Law (NPCL).

1. Choose corporate directors and officers

In New York, nonprofit corporations must elect at least three directors to serve on the board. Minimum age for directors is 18, with some exceptions for organizations involved in youth activities. The board of directors is responsible for drafting the corporation's bylaws and mission and selecting and overseeing the corporate officers, including the executive director.

2. Choose a name for your nonprofit

You must ensure that your desired name for your nonprofit is not already in use by another business. Check New York's Corporation and Business Entity Database to see if your nonprofit name is available. If it's already in use, you must select a different, unique name.

3. File Certificate of Incorporation

The next step is to file a Certificate of Incorporation with the New York Department of State. This certificate requires basic information about the nonprofit, such as:

  • The nonprofit's name and county location
  • The names and addresses of the initial directors
  • The nonprofit's intended duration, if other than perpetual
  • If having a registered agent, the agent's name and address
  • The purpose of the nonprofit

If you are planning on applying for tax-exempt status, be sure to add additional language to the certificate showing that you are organizing for an exempt purpose.

Applying for Tax-Exempt Status

Once you've created a nonprofit corporation, you can apply to obtain federal and New York state tax exemptions.

1. File Form 1023

File Form 1023 with the Internal Revenue Service (IRS) in order to obtain federal tax-exempt status. This form requires a lot of detailed information about your nonprofit, including its history, financial information, internal structure, and governance policies. Smaller nonprofit organizations—those whose income is less than $50,000 or has less than $250,000 worth of total assets—may be eligible to file Form 1023-EZ, which is a far more simpler form that you can file online.

2. Obtain New York state tax exemptions

Once the IRS approves your tax-exempt status, your nonprofit is eligible for certain state tax exemptions. For more information on taxes, visit the New York State Department of Taxation and Finance website.

Applying for tax-exempt status is often a complex process because it requires a good deal of information. If you want more guidance on how to apply for nonprofit status in New York, contact an online service provider who can help assist you.

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