Key Takeaways

  • Connecticut nonprofit corporations must incorporate with the Secretary of State, obtain federal and state tax exemptions, and comply with Attorney General registration rules before fundraising.
  • Nonprofits must maintain good standing through annual IRS Form 990 filings, Connecticut annual reports, and charitable registration renewals.
  • Specific Connecticut rules require at least three directors, bylaws, and a registered agent when forming a nonprofit.
  • Charitable organizations that raise or solicit funds generally must register with the Connecticut Attorney General, with limited exemptions.
  • Ongoing compliance also includes financial audits for nonprofits with revenue above $500,000 and adherence to solicitation laws.

Completing Connecticut nonprofit filing requirements must occur in order to hold a 501(c) (3) status. Operating a nonprofit in Connecticut requires registering with both the state and the IRS and, in some cases, the Connecticut attorney general's office.

How to Form a Connecticut Nonprofit Corporation

Most nonprofit corporations are 501(c) (3) organizations. A company that is a 501(c) (3) is often formed for the purpose of charitable, scientific, or educational purposes. A company registered as a 501(c) (3) is eligible for tax exceptions. Filing for a 501(c) (3) company in the state of Connecticut requires the following steps:

  • File for a Connecticut corporation: Once you have filed as a Connecticut corporation, you can then apply for the 501(c) (3) status.
  • Specify the founding board of directors. The state of Connecticut requires that you have a minimum of three directors.
  • Choose a business name: Have a unique business name for your 501(c) (3) corporation from other nonprofit businesses in the state of Connecticut. The name must also include "incorporated," "company," or "corporation." You can search for available names on the Secretary of State website.
  • Draft and file a nonprofit certificate of incorporation: The nonprofit certificate of corporation should include the following:
    • Business name
    • Statement of purpose
    • Provisions required in the state of Connecticut
    • Name and address of a registered agent
  • Draft nonprofit bylaws: The bylaws should abide by Connecticut law and meet the specific regulations regarding meetings, electing officers and directors, and other required corporate needs.
  • Schedule a meeting with the board of directors: The first meeting is the organizational meeting. It should include the following tasks:
    • Each member should approve the drafted bylaws.
    • Appoint officers.
    • Set an accounting period and tax year.
    • Approve any initial business practices. This includes opening a new bank account or getting a credit card in the name of the nonprofit business.
    • A corporate records binder should also be set up that includes all necessary documents and minutes of the board of directors meetings.
  • File the certificate of corporation with the Commercial Recording Division at the Connecticut Secretary of State. There is a $50 filing fee. The certificate of incorporation can also be completed online.

Connecticut-Specific Incorporation Rules

When forming Connecticut nonprofit corporations, state law imposes specific requirements beyond the federal 501(c)(3) process. These include:

  • Certificate of Incorporation Details: The document must include a clear nonprofit purpose clause, dissolution provisions dedicating assets to another tax-exempt entity, and the names of at least three directors.
  • Registered Agent Requirement: Nonprofits must designate and maintain a Connecticut registered agent with a physical address to accept legal documents.
  • Distinct Naming Rules: Business names must be distinguishable from existing entities and include a corporate identifier such as “Incorporated,” “Company,” or “Corporation.”

These rules ensure compliance with both Connecticut’s nonprofit corporation statute and IRS requirements for tax-exempt status.

Obtaining Federal and State Tax Exemptions

Once the nonprofit corporation creation is complete, you can then file for tax exemptions with the following steps:

  • File Form 1023 with the IRS: This complex document requires information about the nonprofit organization. Smaller nonprofits can fill out Form 1023-EZ which is a shortened version of Form 1023.
  • File for your Connecticut state tax exemption: After you have filed for a federal tax exemption, you can then file for a Connecticut tax exemption. You can find this form through the Connecticut tax agency.
  • Register with the Connecticut attorney general: Some nonprofits are also required to register with the Connecticut attorney general, especially if they plan on holding fundraisers or soliciting for funds.

Sales and Property Tax Exemptions in Connecticut

In addition to income tax exemption, Connecticut nonprofit corporations may qualify for other state-level benefits:

  • Sales and Use Tax Exemption: Nonprofits can apply with the Connecticut Department of Revenue Services to be exempt from paying sales tax on qualifying purchases.
  • Property Tax Exemption: Charitable organizations may also be eligible for exemption from local property taxes if property is used for charitable purposes. Applications are made through local tax assessors.

These exemptions can substantially reduce operating costs, but nonprofits must reapply or renew periodically depending on the type of exemption.

Registering with the Connecticut Attorney General

You can register your nonprofit corporation with the Connecticut attorney general by submitting a charitable organization registration application. You will also have to include a copy of the IRS 990 form attached to the application. Filing with the Connecticut attorney general is necessary before soliciting for any fundraising activities. Make this filing online. There are exemptions regarding this rule. Before filing, check the Attorney General's website under the topic of charitable solicitation registration.

Charitable Solicitation and Fundraising Rules

Most Connecticut nonprofit corporations that solicit donations from the public must register with the Attorney General before fundraising. Key points include:

  • Charitable Registration Renewal: Registration must be renewed annually, typically within five months after the fiscal year ends.
  • Exemptions: Certain organizations, such as religious institutions and smaller nonprofits that raise under $50,000 annually and have no paid fundraising staff, may be exempt from registration.
  • Fundraising Contracts: If a nonprofit hires a professional fundraiser, both the fundraiser and the contract must be filed with the Attorney General’s office.

These rules help ensure transparency and protect donors, making compliance critical for nonprofits seeking community trust.

Annual Filing Requirements to Maintain a Connecticut Non-Profit

A Connecticut nonprofit will also have to maintain their 501(c) (3) status by submitting the appropriate documents each year:

  • Submit an annual report form online to the Connecticut secretary of state: This form fee is $50 and requires completion each year, based on the incorporation or registration date.
  • Submit an annual report to the IRS: Nonprofits must submit Form 990 each year to the IRS. The filing is free and is due within four and a half months after the end of the fiscal year.
  • Submit an annual report to the Connecticut state attorneys general: Submit a charitable organization form with the Connecticut state attorneys general each year within five months of the end of the fiscal year. There is a $50 filing fee and you must include a financial audit for statements that are over $500,000.

Audit and Financial Reporting Obligations

Beyond annual reports, Connecticut imposes financial reporting rules that vary by revenue level:

  • Gross Revenue Over $500,000: Nonprofits must file an audited financial statement prepared by an independent CPA along with their charitable registration renewal.
  • Revenue Between $200,000 and $500,000: Organizations may be allowed to submit reviewed financial statements instead of a full audit.
  • Smaller Organizations: Those under $200,000 may submit unaudited financial statements, but must still file annual IRS Form 990.

Meeting these requirements ensures that Connecticut nonprofit corporations remain in good standing with the Attorney General and maintain their credibility with donors.

Frequently Asked Questions

  1. How many directors are required for a Connecticut nonprofit corporation?
    Connecticut law requires at least three directors when forming a nonprofit corporation.
  2. Do all Connecticut nonprofits need to register with the Attorney General?
    Not all. Religious organizations and nonprofits raising under $50,000 annually without paid fundraisers may be exempt.
  3. What annual reports must Connecticut nonprofits file?
    Nonprofits must file an IRS Form 990, a Connecticut Secretary of State annual report, and, if fundraising, an Attorney General charitable registration renewal.
  4. Are Connecticut nonprofits exempt from sales tax?
    Yes, if they apply and are approved by the Department of Revenue Services. Exemptions apply only to purchases related to their exempt purpose.
  5. When is a financial audit required for Connecticut nonprofits?
    An audit is required if annual gross revenue exceeds $500,000. Smaller nonprofits may submit reviewed or unaudited statements.

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