Texas Nonprofit Compliance Checklist

You started your nonprofit to make a difference — not to wade through government filings and compliance deadlines. But here's the hard truth: the organizations that lose their 501(c)(3) status, miss grant eligibility, or face IRS scrutiny almost never do so because of bad intentions. They fall behind on paperwork they didn't fully understand.

The question most Texas nonprofit leaders ask us is simple: "What exactly do I have to file, and when?" The answer isn't complicated, but it does come from four directions at once: the IRS, the Texas Secretary of State, the Texas Comptroller, and your own governing documents.

This checklist pulls every requirement into one place, with Texas-specific rules, real deadlines, and plain-English explanations that national compliance guides tend to gloss over.

At a Glance: Your Full Compliance Snapshot

1. Federal IRS Requirements

Note: Missing Form 990 for three consecutive years results in automatic revocation of your 501(c)(3) status — no warning, no grace period. Reinstatement is possible but expensive and time-consuming.

File the Correct Form 990 (Annual)

The form version depends entirely on your financial size. According to IRS.gov:

May 15 applies to calendar-year organizations. For fiscal-year filers, it is the 15th day of the 5th month after your fiscal year ends.

File Form 990-T If You Have Unrelated Business Income

If your nonprofit earns income from any trade or business not directly related to your exempt purpose, that income is taxable — even with full 501(c)(3) status. Common triggers include:

• Advertising revenue from your website or publications
• Rental income from unrelated commercial tenants
• Income from services sold to the general public

File Form 990-T and pay tax on that unrelated business income. Same deadline as your Form 990.

Payroll Taxes (If You Have Employees)

Make IRS Documents Available for Public Inspection

You must make the following available to anyone who asks — in person or online:

• IRS Form 1023 or 1024 (your original exemption application)
• IRS Determination Letter
• Your three most recent Form 990 filings

Issue Donor Acknowledgement Letters

• $250 or more — A written acknowledgement is legally required

• $75 or more in goods/services received — Your receipt must state the fair market value of what the donor received so they can calculate their actual deductible amount

Texas Private Foundation Note: If classified as a private foundation, you must also email a PDF copy of your annual Form 990-PF directly to the Texas Attorney General at [email protected].

2. Texas Secretary of State Filings

Texas takes a lighter corporate reporting approach than most states — but that doesn't mean your obligations with the Secretary of State are zero. Two requirements carry real consequences if missed.

Texas Periodic Report — Form 802 (Every 4 Years)

Missing this filing can result in your organization losing good standing with the state, which affects your ability to apply for grants, open bank accounts, and enter into contracts.

Maintain a Registered Agent at All Times

Your organization must continuously maintain a registered agent with a physical street address in Texas. P.O. boxes are not permitted.

• If your agent or address changes, file Form 401 with the Secretary of State immediately

• Letting this lapse can result in your organization losing legal standing without any warning

Charitable Solicitation Rules

Most Texas 501(c)(3)s do not need a state fundraising permit. However, additional state registration is required if:

• Your organization uses professional fundraisers or fundraising consultants

• You are a veterans' organization conducting charitable solicitations

Regardless of registration status, all fundraising representations must be strictly truthful under Texas consumer protection law.

Raffle Regulations (If Applicable)

If your nonprofit holds fundraising raffles, the Texas Lottery Commission applies strict rules:

• Only qualified nonprofit organizations may hold charitable raffles

• Your own eligible members must conduct the raffle — third-party operators are prohibited

• There is a cap on the number of raffles permitted per calendar year

3. Texas Comptroller — Tax Exemption Requirements

Federal 501(c)(3) status and Texas state tax exemption are completely separate. One does not automatically grant the other. Until you receive Comptroller approval, your nonprofit is liable for Texas franchise tax and must collect and remit sales tax.

Apply for Franchise and Sales Tax Exemption — Form AP-204 (One-Time)

Once approved, your organization is exempt from Texas franchise tax and sales tax on qualifying purchases. No renewal needed.

Monitor Your Exemption Status

• If your mission or core activities change significantly, notify the Comptroller
• The Public Information Report is only required if your franchise tax exemption is not yet finalized or has lapsed
• Approved, active exemptions require no annual filing with the Comptroller

4. Board Governance & Internal Recordkeeping

This is the area most Texas nonprofits underestimate — and the one the IRS looks at most carefully. Poor documentation is one of the most common triggers for scrutiny, and it shows up directly in the Form 990 governance questionnaire that donors and grant makers read.

Maintain Minimum Board Composition

Under Texas Business Organizations Code, Chapter 22:

Hold at Least One Annual Board Meeting

The annual meeting must formally accomplish:

• Approve the budget for the upcoming year
• Elect or re-elect officers and directors
• Review key governance policies (conflict of interest, financial controls)
• Meet quorum requirements as defined in your bylaws
• Be properly noticed in advance per your bylaws

Keep Written Minutes for Every Official Meeting

Minutes must document:

• Motions made and by whom
• Votes cast and outcomes
• Resolutions passed
• Key decisions on budgets, contracts, and officer appointments

Thorough minutes protect your corporate veil and are typically the first thing requested in an IRS audit or legal dispute.

Annual Conflict-of-Interest Disclosures

All board members and key staff must complete and sign a conflict-of-interest disclosure form every year. This is not optional — it appears as a direct question in IRS Form 990, and grant makers check for it routinely.

Document in your board minutes:

• Who disclosed a potential conflict
• How the conflict was managed or recused

Document Retention Policy

Keep Bylaws Updated

Review your bylaws every two to three years. An organization operating outside its bylaws—even unintentionally—creates legal exposure that surfaces quickly in grant applications, audits, and board disputes.

Complete Compliance Deadline Calendar

Download Your Free 2026 Checklist

Grab the printable version to track every item as you go.

⬇ Download the 2026 Texas Nonprofit Compliance Checklist (PDF)

Related Read

How to Start a Nonprofit Organization in Texas in 12 Steps — The complete formation guide, from naming your organization and drafting bylaws to filing for 501(c)(3) status and receiving your IRS Determination Letter. If you're in the early stages, start here before tackling compliance.

Need Help Staying Compliant?

Compliance paperwork has a way of piling up—especially when you're managing programs, staff, and fundraising simultaneously. Beacon Nonprofit works with Texas organizations to make sure nothing slips through the cracks: from governance policies and board structure to annual filings and 501(c)(3) formation support.

Visit Beacon Nonprofit →

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