Incorporate? EIN? Federal Income Tax Umbrella? HELP!!!! Understanding Your Local Chapter’s Federal and State Requirements

Three Parts to Understand: 1. Incorporate 2. EIN 3. Income Tax Umbrella

1. Incorporate What Does it Mean? To obtain an official charter or articles of incorporation from the Florida Dept. of State for an organization. Click after the question is read.

1. Incorporate Why Become Incorporated? Your local Association is its own separate entity. It does not belong to the school district or FSNA or SNA. One of the most important reasons to incorporate is that incorporating protects your local officer’s personal assets from any association liabilities such as creditors or lawsuits.

1. Incorporate Why Become Incorporated? In other words, if your local Association is not incorporated, the LOCAL OFFICERS are PERSONALLY RESPONSIBLE for all liabilities of your local Association.

1. Incorporate How Do the Chapters Become Incorporated? If your chapter is not already incorporated, simply file Articles of Incorporation with the Florida Department of State, Division of Corporations. The FSNA office can help with this.

1. Incorporate How Much Does it Cost to Incorporate? It costs about $70 to file for incorporation.

Note-not completed by May 1. 1. Incorporate What are the Annual Filing Requirements? If your chapter is incorporated, your chapter will have to file a Not-For-Profit Corporation Annual Report with the Florida Department of State, every year. To avoid a $400 penalty, the report must be processed by the FL. Dept. of State by May 1 Note-not completed by May 1. This is explained again in the next few slides.

1. Incorporate What are the Annual Filing Requirements? Reminders from the FL. Dept. Of State will be emailed to the address they have on record. Know who filed the prior year! The Annual Report form is on the Fl. Dept. of State web site. Go to www.sunbiz.org. You will need your State document number that was sent to you from the Fl. Dept. of State with your chapter’s stamped articles of incorporation. Stress the May 1 deadline.

1. Incorporate What Questions are on the Annual Report? The report asks for the contact information of your current local officers. No financial information is requested.

1. Incorporate How Do the Chapters Pay for the Annual Report? If paying by check, print out the form. Complete the form and mail it with the check to the address on the form. It will take 3 weeks to process your check. To avoid a penalty, be sure to mail it by the first week in April. If paying by credit card, complete the form on-line and follow instructions for payment. Your report will be processed in 2-3 days. To avoid a penalty, complete on-line by April 26.

1. Incorporate What is the Fee for Filing the Annual Report? If your chapter is incorporated, it costs about $65 per year to be paid with the Annual Report. Restate that the report must be processed by the FL. Dept. of State by May 1, not paid by May 1.

1. Incorporate Annual Report Review Does Our Chapter Have to Incorporate? No, but again, if your local Association is not incorporated, the LOCAL OFFICERS are personally liable. Click after question is read.

1. Incorporate Annual Report Review What information do you need to file? Which local officer is in charge of filing by May 1? Who filed the prior year? Where are the filings for the prior years? About $70 from your local chapter funds/credit card.

1. Incorporate Annual Report Review What information do you need to file? Document number from your chapter’s stamped articles of incorporation. The Florida Dept. of State stamped your articles when you filed to become incorporated. Name and contact information for your chapter’s President, President-Elect and Secretary/Treasurer.

1. Incorporate Annual Report Review Where can you find this information? Ask the previous local chapter officers. Or, go to www.sunbiz.org and click on the Popular Link: Look up a Business Name. Always keep a copy for your local chapter’s records.

2. EIN What Does it Mean? EIN (Employer Identification Number) is an unique number that identifies your local Association to the IRS. It has nothing to do with your tax status. This is not the school district number or the FSNA number or SNA number. Click after the question is read. The EIN has nothing to do with tax status. The tax status comes with step 3 and will be explained.

2. EIN Why Does Your Local Chapter Need an EIN? You need an EIN to file the annual 990N e-postcard. EIN is the number that you should use on your local association's bank account information. If your local chapter is not already under the FSNA Federal Income Tax Exemption Umbrella you will need an EIN to get under the umbrella. This will be explained in step 3. Click after 1. is read

2. EIN How Do You Apply for an EIN? To file for an EIN, you must complete the SS-4 form and submit it to the IRS. Contact at the FSNA office for the partially completed form and instructions. Click after each bullet is read. We have a copy of the SS-4 form is you would like to come up after the presentation and take a look.

2. EIN Ask your prior officers. How Do I know if My Local Association Already has an EIN? Ask your prior officers. Come talk to us after this presentation or contact at the FSNA office. Click after each bullet is read

3. FSNA Federal Income Tax Exempt Umbrella What Does it Mean? Federal tax exemption means that an organization does not pay corporate federal income tax from activities that are related to the purpose for which the organization was granted exempt status. Click after the first bullet is read. Income tax is federal tax that all organizations pay on the net profit of the organization. Just as most individuals pay income tax on their personal earnings, so must most organizations pay taxes on the organization’s earnings.

3. FSNA Federal Income Tax Exempt Umbrella Why? If your local Association is not federal income tax exempt then your Association is required to pay taxes on all income received by your Association. Click after bullet is read. Ask the audience to raise their hand if they have an EIN for their association. Then ask the attendees who did not raise there hand, What number they are giving the bank for the association funds?” If they say the local presidents social security number, then the president is required to include any income from the association on their personal taxes. If they say the district’s EIN, tell them that they need to get an EIN for the association immediately. Their association is a separate entity from the district and the district number should never be used on any association business. To get under the umbrella, the association must first have an EIN-weather the association is incorporated or not. If the income is not reported, the local officers are potentially liable for payment of income taxes, penalties, and interest.

3. FSNA Federal Income Tax Exempt Umbrella Why? Your tax exempt status is awarded when you get under the FSNA federal income tax exempt umbrella. Your tax status becomes federal income tax exempt under section 501 (c)6. Many organizations require proof of tax exempt status in order to have fundraising events.

3. FSNA Federal Income Tax Exempt Umbrella How Do You Apply? You must have an EIN to apply for the FSNA Umbrella. Please contact the FSNA office if you would like to start these procedures.

3. FSNA Federal Income Tax Exempt Umbrella How Much does it Cost? There is no cost to get under the FSNA Federal Income Tax Exempt Umbrella.

3. FSNA Federal Income Tax Exempt Umbrella What Are the Annual Filing Requirements? All federal income tax exempt local Associations whose gross receipts (the $ received by your Association) are less than $50,000 are now required to e-file a 990N. To clarify, if your local Association has gross receipts greater than $50,000, you would be required to file a 990 which is much more complicated.

3. FSNA Federal Income Tax Exempt Umbrella What are the Annual Filing Requirements? The 990N must be e-filed each year by the 15th day of the fifth month after the close of the local chapter’s tax period. In other words, your Association’s tax period should end on July 31, so the e-filing is due by December 15. Be safe! E-file in August! Always keep a copy for your Association’s records!

3. FSNA Federal Income Tax Exempt Umbrella What Questions are on the 990N E-card? The report asks for the contact information of your current local officers. No financial information is requested.

3. FSNA Federal Income Tax Exempt Umbrella Is There an Annual Fee to e-file the 990N? No, there are no fees to e-file the 990N.

Breaking it Down 1. Incorporate 2. EIN 3. FSNA Umbrella Initial Form Articles of Incorporation SS-4 FSNA Submits Initial Cost About $70 $.00 Issuing Department FL Dept. of State, Division of Corporations U. S. Dept. of Treasury, IRS Annual Reporting Not-For-Profit Annual Report No Annual Reporting 990N Annual Reporting Cost About $65 No Annual Fees Penalty if not filed on time. $400 Late fee, penalties, loss of Incorporation N/A Late fees, penalties, loss of federal income tax exemption.

Additional Information Does the local Association HAVE to incorporate in order to be under the FSNA Federal Income Tax Exemption Umbrella? No, but your Association does need an EIN to be under the FSNA Federal Income Tax Umbrella. Click after the bullet is read.

Additional Information Sales Tax vs. Income Tax Sales Tax- State tax paid on purchases made by the Association. Local Associations do not meet the requirements to be sales tax exempt. They should pay sales tax on all purchases made by the Association. Click after Sales Tax paragraph is read. Income Tax- Federal tax that all organizations pay on the net profit of the organization. Just as most individuals pay income tax on their personal earnings, so must most organizations pay taxes on the organization’s earnings. Your Association should be under the FSNA Income Tax Umbrella in order to be income tax exempt.

Additional Information TIN vs. EIN TIN- (Tax Identification Number) A TIN is a tax exempt number that is assigned by the Florida Department of State. The TIN identifies organizations as exempt for state sales tax. Again, FSNA and local Associations do not meet the requirements to be sales tax exempt and therefore, will not receive a TIN. Click after EIN paragraph is read. EIN- (Employer Identification Number) a unique number that identifies your local Association to the IRS. EIN has nothing to do with tax status. Tax status as a 501(c)6 is awarded when your chapter is under the FSNA Federal Income Tax Umbrella.

Additional Information As a Professional Association, What Should the Local Chapter Have on File? Bylaws – it is mandatory for every local association to have bylaws! Definition: the written rules of conduct of any organization. They provide rules on the elections of a board and officers, filling officer vacancies, and types and duties of officers. Bylaws are a contract among members, and must be formally adopted and/or amended. Click for each number

Additional Information As a Professional Association, What Should the Local Chapter Have on File? If your chapter is incorporated - stamped Articles of Incorporation and Annual Report filings with your chapter’s Document Number. If you are under the FSNA Federal Income Tax Umbrella - 990N filings. Click for each number

Additional Information Make sure all future officers are aware of your local chapter’s filing requirements. Is your chapter incorporated and need to file the Annual Report? Does your chapter have an EIN and need to file the 990N? Make sure future officers know where the paperwork is filed. Make sure address and contact information is updated and officers know where to get the Association’s mail. Click after each bullet is read.

Additional Information If your local Association is not incorporated, but already has an EIN, and is under the FSNA Federal Income Tax Exempt Umbrella, what steps do you need to take if your chapter decides to incorporate? Become incorporated Get a new EIN as an incorporation Re-file under the FSNA Federal Income Tax Call the FSNA office. Staff can assist with all the filings.

Questions and Answers What questions do you have? Toll Free Phone: (888)878-1832 Email: jblair@floridaschoolnutrition.org