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Welcome to our Maryland Nonprofit Startup Guide! If you’re passionate about helping others and have an idea to serve your community, starting a nonprofit is a great way to turn your vision into a reality. There are many different types of nonprofits - religious, educational, human service oriented, animal welfare, and more. What all nonprofits have in common is a focus on helping others and benefiting their community. You are genuinely committed to these goals so you are already well on your way!
According to the National Center for Charitable Statistics, there were over 40,000 nonprofit organizations in Maryland in 2012. Before you start a new nonprofit, make sure you have identified an unmet need in your community and know that there are not any existing organizations serving your cause. If another organization exists, consider working together, as that may be a better way to make an impact in your community and use existing resources.
When you are ready to start your nonprofit, plan to incorporate and apply for 501(c)(3) status, as these are important steps to fully achieve your goals. As a 501(c)(3) nonprofit, you will be able to apply for grants and accept donations, be exempt from federal corporate income tax, and limit the liability of your organization’s officers and directors. Most importantly, you will gain credibility and legitimacy for your cause, instilling the public with confidence in your organization.
This guide will walk you through the basic steps to start your nonprofit in Maryland. Let’s get started!
Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.
| Name Search: | Maryland State Department of Assessments and Taxation (SDAT) Name search |
| Suffix: | The name of a corporation must include one of the following words or an abbreviation of one of the following words: (1) "Company", if it is not preceded by the word "and" or a symbol for the word "and"; (2) "Corporation"; (3) "Incorporated"; or (4) "Limited". |
Maryland offers three types of nonprofit corporations:
| Religious Corporation | This type of corporation is appropriate only for incorporating a religious congregation which will be requesting tax-exempt status. |
| Tax-Exempt Nonstock Corporation | This type of corporation would be most appropriate for one or more individuals engaged in a nonprofit enterprise. Use this version if you intend to apply for federal income tax exemption under §501(c)(3) or similar IRC subsection. |
| Nonstock Corporation | This type of corporation would be most appropriate for one or more individuals engaged in a nonprofit enterprise. |
The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.
| Maryland director requirements: |
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| Maryland officer requirements: |
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A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local Maryland registered agent office is located in Oakland, MD. We offer registered agent service independently or as part of our nonprofit formation packages.
Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.
| Agency: | Maryland State Department of Assessments and Taxation (SDAT) |
| Form: | Articles of Incorporation for Tax-exempt Nonstock Corporation |
| Filing Method: | Mail, fax, in-person, or online. |
| Agency Fee: | $100 filing fee + $20 organization & capitalization fee + $50 development center fee if applying for 501(c)(3),(4), or (6) + optional $5 return mail fee + optional $50 expedite fee. The expedite fee is required to file online, by fax, or in-person. |
| Turnaround: | ~10+ weeks. ~7 business days with expedite fee online or by fax. Same-day if filed in-person with expedite fee by 4:15pm. |
| Law: | Code of Maryland - Corporations and Associations - Title 5: Special Types of Corporations |
| Notes: | If you do not pay the expedite fee, you could have to wait 10+ weeks for the secretary to process your articles. Upon processing, you will only receive notice of filing if you pay the $5 return mail fee; otherwise, look in the secretary's online records ~10 business days later to see your entity record. |
After filing articles of incorporation, you must file an initial report.
Not required
This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.
| Agency: | Internal Revenue Service (IRS) |
| Form: | |
| Instructions: | Applying for an EIN without a SSN/TIN:
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| Filing Method: | Mail, phone, fax, or online. |
| IRS fee: | $0 |
| Turnaround: | Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail. |
| Notes: | The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN. |
As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.
A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.
Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.
At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.
Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.
The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.
Newly formed organizations are automatically enrolled in Maryland property tax.
Register for a Maryland tax accounts and licenses by filing:
| Submit to: | Comptroller of Maryland http://www.comp.state.md.us/ |
| Form: | Form CRA: Maryland Combined Registration Application |
| Filing Method: | Mail or online |
| Fee: | $0 |
| Notes: | This registration includes an admissions and amusement tax account, alcohol tax license, income tax withholding account, motor fuel tax account, sales and use tax license, use tax account, transient vendor license, sales and use tax exemption certificate (for nonprofit organizations), tire recycling fee account, tobacco tax license, and/or unemployment insurance account. |
Other local taxes in Maryland require no additional registration. Questions can be directed to Maryland local taxing agencies.
Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.
Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!
| Agency: | Internal Revenue Service (IRS) |
| Form: | |
| Instructions: | IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024. Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization. |
| Filing Method: | |
| Agency Fee: | $275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023. |
| Turnaround: | 1023-EZ average: <1 month. 1023 average: 3-6 months. |
As of January 1, 2024, millions of entities in the US need to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) as part of the Corporate Transparency Act (CTA). Nonprofits without 501(c) tax exemption formed before that date must submit BOI by December 31, 2024, while those formed after must submit it within 30 days of formation. Once 501(c) tax exemption is granted, the organization may claim an exemption from BOI reporting requirements via an update filing to FinCEN. Our BOI Reporting Service includes up to four initial, updated, and corrected reports per year, ensuring the data you report to FinCEN is updated.
With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.
To file to obtain exemption from state income tax:
To file to obtain Sales Tax Exemption:
| Agency: | Comptroller of Maryland |
| Form: | |
| Agency Fee: | $0 |
| Notes: | Must have IRS tax determination letter first. |
Apply for exemption from Maryland property tax with the Maryland SDAT office where the property is located. Certain charitable, fraternal, educational, and religious organizations may be eligible. Apply by September 1st or the exemption will be delayed until the following year. Find your assessment office and exempt application.
This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.
| Agency: | Maryland Secretary of State - Charitable Organizations Division |
| Law: | Maryland Ann. Code, Business Regulation Article, § 6-401 et seq |
| Foreign Qualification is Prerequisite: | No |
| Registered Agent (Special Agency) Required? | No |
| Exemption Eligible Organizations: |
Charitable organizations that do not use a professional solicitor and either:
Additionally, the Secretary of State may exempt from the requirement of a registration statement or annual report a charitable organization that:
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| Law: | Maryland Ann. Code, Business Regulation Article, § 6-102 and Maryland Ann. Code, Business Regulation Article, § 6-413 |
| Notes: | There is no registration requirement, but charities must submit a letter to the Secretary of State stating their claim of an exemption. |
| Exemption Eligible Organizations: | Charities that received less than $25,000 in contributions during their most recent fiscal year |
| Form: | |
| Filing Method: | Mail, email dlcharity_sos@maryland.gov, or online |
| Agency Fee: | $0 |
| Exemption Eligible Organizations: | Charities that received less than $25,000 in contributions during their most recent fiscal year |
| Form: | |
| Filing Method: | Mail, email dlcharity_sos@maryland.gov, or online |
| Agency Fee: | $0 |
| Due: | Annually within 8 months after fiscal year end. |
| Filing Method: | |
| Agency Fee: | Depends on charitable contributions:
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| Turnaround: | 15-45 days |
| Original Ink: | Not required |
| Notarization Required?: | Not required |
| Notes: |
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| Before you Apply: | Domestic Applicants:
Foreign Applicants:
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| How to Apply: | Domestic Applicants:
Foreign Applicants:
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| Required Attachments: |
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| Filing Method: | |
| Agency Fee: | Depends on charitable contributions:
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| Due: |
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| Due Date Extension: | Due dates are automatically extended for 4.5 months beyond the original due date. |
| Original Ink: | Not required |
| Notarization Required?: | Not required |
| Penalties: | There is a late fee of $25 for each month that passes after the due date. The late fees do not cap off. |
| Notes: | Make sure to include all required attachments, including annual financial report |
| Required Attachments: |
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Not required
Formal reinstatement is not required. Charities who wish to renew a canceled registration should submit a renewal filing along with the required financials, attachments, and payment of both the late fees and registration fees for each year not registered.
| Filing Method: | |
| Agency Fee: | Varies |
| Notes: | Fiscal year can be changed during the standard renewal process. |
| Filing Method: | Mail or email dlcharity_sos@maryland.gov |
| Agency Fee: | $0 |
| Notes: | To close out your registration, submit articles of dissolution or a letter stating the organization is no longer soliciting in Maryland. Past due filings or fees are not required in order to close an organization's registration. |
To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.
Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.
Maryland nonprofits who wish to conduct bingo, raffles, tournaments, and other charitable games are subject to Maryland Charitbale Organization Gaming Laws. Charitable gaming laws differ by city or county in Maryland.
Some of our clients incorporate on their own and seek our professional assistance with the next steps. In such cases, we review the existing documentation and make any necessary changes. We’re happy to help at any point. Keep in mind, the earlier you enlist our expertise, the more time you’ll save and the greater success you'll experience in the end!
If you have an existing for-profit entity and are looking to transition to a nonprofit, we are very familiar with this situation and can help! Simply sign up for our professional formation services, and your specialist will review your existing entity and assist with the appropriate next steps.
You are not required to use an attorney. You can set up your nonprofit yourself but doing so requires a great deal of expertise and time. The IRS estimates the 501(c)(3) application takes over 100 hours in research and preparation. Enlisting the help of a professional greatly increases your likelihood of success and saves you time. With our professional formation services, your specialist prepares and files your applications for you with guaranteed approval. Take advantage of our track record of 100% IRS approval and get your nonprofit approved, guaranteed!
You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!
Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our Maryland nonprofit compliance guide to learn more!
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Below is an overview of the paperwork, cost, and time to start an Maryland nonprofit.
