Steps for Obtaining Tax-Exempt Status
for Your Neighborhood Association
Neighborhood Associations with gross receipts of $5,000 or less per year are not required to file form 1023. These organizations are exempt automatically if they meet the requirements of I.R.S. section 501(c)(3).
File your neighborhood association's Articles of Incorporation with the State.
• Obtain an Employer Identification Number.
• File I.R.S. Forms 1023 & 8718 with appropriate fees.
• Receive Tax-Exempt Status from the I.R.S.? (average turnaround time from the time all necessary documents are filed is 100 days)
• File for State Sales Tax Exemption.
• Make I.R.S. suggested corrections.
• File for State Franchise Tax Exemption.
Important Facts about Tax-Exempt Status
Your Neighborhood Association may obtain tax exempt status if:
It is incorporated by the State as a nonprofit corporation and organized solely for charitable purposes. This includes organizations dedicated to:
• Correct community deterioration
• Combat juvenile delinquency
• Lessen neighborhood tensions
In order to keep your Association tax-exempt status, you must ensure that:
• All assets are permanently dedicated to an exempt purpose. This means that, even upon assets of the corporation may to exempt purposes or groups. Dissolution of the group and all assets must be used or donated, no part of the net earnings or
• Be used for the benefit of, or be distributed to, the members or officers.
• No portion of the corporation’s assets or funds may be used to influence legislation, promote propaganda, or benefit specific political candidates.