Don’t Throw Away Your Tax Exemption

Don’t Throw Away Your Tax Exemption

On May 15th, over 1,000 Montana nonprofits will lose their tax-exempt status. Will your nonprofit be one of them? Nonprofits that have not filed a Form 990 with the IRS in the last three years, will lose their status this year. If you have any questions about your status, the Urban Institute’s National Center for Charitable Statistics

has developed a simple tool to find out if you need to file. Here’s how in 4 easy steps:

1. Go to this website at the Urban Institute’s National Center for Charitable Statistics

2. Enter your nonprofit’s name, uncheck the box titled “Limit to organizations in danger of revocation”, and press the submit button

3. If there is an alert “FILE NOW” listed by your nonprofit’s name under Filing Status, click on that link to electronically file the proper form.

4. File a 990 or your nonprofit’s tax-exempt status will be revoked on May 16th.

Filing by May 15th will prevent your organization from having to pay $750 and submitting an application

for tax-exemption with the IRS all over again!
It’s easy to save your tax-exempt status by filing.


Visit our website – for more information.

Don’t Throw Away Your Tax Exemption

Non-Profit Tax Credit for Health Insurance

Here is a website that is the clearest explanation of the new tax credit for non-profits regarding health insurance:

The Arts Council would love to know if any of you are applying for this credit.

Non-Profit Tax Credit for Health Insurance

Health Care and Nonprofits

Everyone should go read this article by Tim Delaney at The Nonprofit Quarterly.

Here’s a snippet:
How can the White House Council of Economic Advisers (CEA) totally overlook more than 10% of the American workforce?
recent CEA report regarding the economic impacts of health care reform on small businesses completely disregards the 15 million people employed by nonprofits (in 2008, according to DHHS [PDF]) and an entire sector that accounts for 11-12% of the nation’s GDP (in 2007, according to GAO [PDF]).

Thanks to Brian Magee at Montana Nonprofit Association for this one.

Health Care and Nonprofits

Independent Contractor versus Employee followup

Following is a memo sent by our accountant, Carleen Layne. Many of you have been following the independent contracter versus employee issue closely…..

Independent Contractor versus Employee followup:

I have again met with Labor and Industry representatives and have a proposed exemption for nonprofits from workers compensation as shown below—the wording right now says that it’s for performing arts and humanities only, but I’ve had an email exchange with the attorney who agrees this should be changed to cover all arts organizations. A further agreed to amendment is to change the dollar amount of $600 to link it to the minimum wage, so it will go up as that does. Right now it appears that amount would be $675.

I was more hopeful before I got more of the facts about the issue, which as it turns out is a very complex issue and not only relates to state, but federal requirements, as well. I saw recently on the IRS website that this is going to be a hot audit topic for them as well.

I understand that this may not look like a lot, but I believe it’s the maximum we can hope for at this time. It covers only the smallest payments and anyone who makes over this amount of money in a year would still either have to jump through the Independent Contractor hoops or be an employee and fully covered. At least they won’t be making less than it costs to apply for the exemption. Every individual you pay is either a vendor, e.g. the people you buy supplies from, an employee or an independent contractor. In Montana you must go through the exemption process to be determined to be an independent contractor, otherwise you’re an employee. So we’ve been caught in an unintentional net with the law change in Montana.

Even with this exemption to not have to cover people who make less than the specified amount per year, you still have to deal with the liability issue. I don’t know how insurance companies would respond to this. The exemption that Labor and Industry prepared is as far as the state is willing/able to go to fix this matter. Their big deal is liability, which is why they changed the law in the first place–what happens if someone gets hurt? Who pays for it?

To make major changes in the law would be a big fight over a long haul at the federal level too. I believe it would have to involve the whole nonprofit sector and be a big orchestrated magilla. Right now I think nonprofits in many state are acting like the people they pay are independent contractors without any evidence that is in fact the case. If the IRS does make this a big deal, the whole national sector could find it self in the same position we’re in today in Montana. That might be what it takes to make major change. Sorry–I wish I were more optimistic.

Please let me know ASAP if this would provide any relief to your case and if it will, I’ll hook up with Labor and Industry to introduce legislation this session. We believe we have a legislator who will sponsor this legislation.

39-71-401. Employments covered and employments exempted. (1) Except as provided in subsection (2), the Workers’ Compensation Act applies to all employers and to all employees. An employer who has any employee in service under any appointment or contract of hire, expressed or implied, oral or written, shall elect to be bound by the provisions of compensation plan No. 1, 2, or 3. Each employee whose employer is bound by the Workers’ Compensation Act is subject to and bound by the compensation plan that has been elected by the employer.
(2) Unless the employer elects coverage for these employments under this chapter and an insurer allows an election, the Workers’ Compensation Act does not apply to any of the following employments:
. . .
(z) employment of a person paid less than [$600] [in cash wages] a [calendar] year by a not-for-profit organization, if the not-for-profit organization is primarily engaged in the presentation of the performing arts or the humanities to the public.

Independent Contractor versus Employee followup

New from the National Governors Association: Arts & the Economy

New from the National Governors Association: Arts & the Economy

The National Governors Association has released a new 40-page report, Arts & the Economy: Using Arts and Culture to Stimulate State Economic Development, that demonstrates the vital role that arts and culture industries play in the economic health of every state. Using concrete examples from many states, the report details benefits provided by the creative industries – including job creation, increased tourism, and ways the arts give businesses a creative edge.

Arts & the Economy was prepared in partnership with the National Endowment for the Arts and NASAA. Read this report and the six Issue Briefs that have resulted from this collaboration.

New from the National Governors Association: Arts & the Economy

Big Sky Institute for the Advancement of Nonprofits Grant Opp

This one has a really short turn around (Due Oct 20th) but it might be of interest:

The Big Sky Institute for the Advancement of Nonprofits is pleased to
announce the launch of a new grantmaking program to build nonprofit effectiveness!
The purpose of Montana Nonprofit Connections is to strengthen the capacity and management capabilities of nonprofit organizations based in Montana. It is designed to strengthen nonprofit organizations so that they become more effective and efficient in managing their internal operations and accomplishing their mission.
During the fall of 2008, grants from Montana Nonprofit Connections will support an organizational assessment process with the assistance of an experienced consultant. The assessment will look at various facets of the organization, and help set priorities for improving governance, management, and leadership.
The second round of granting under this program will occur in Spring of 2009, and will provide funds to Montana nonprofits to carry out consultant-assisted projects. Only organizations that have recently conducted a comprehensive assessment will be eligible for the Spring 2009 round of project funding. Funds will support projects such as conducting strategic planning, developing a stronger board, improving financial management, or strengthening fundraising efforts
The guidelines and application form will be available Thursday, September 25 at the Big Sky Institute website, (look for the Montana Nonprofit Connections button on the left side of the page).
The deadline for applications will be Monday, October 20, 2008.
Questions? Contact Project Director Ned Cooney – or 406/212-7242

Big Sky Institute for the Advancement of Nonprofits Grant Opp