How to Start a Nonprofit in Maryland

How to Start a Nonprofit in Maryland

Maryland requires multiple separate tax exemption applications (income tax, sales tax, property tax) and operates a charitable registration system based on contribution thresholds. The $170 incorporation fee is higher than many states, but annual reporting is free for nonprofits. Plan for complexity at the post-formation stage.

Formation Requirements

Filing Office

The Maryland State Department of Assessments and Taxation (SDAT) handles nonprofit incorporations. Online filing through Maryland Business Express is recommended.

Filing Fees:

• Base fee: $100
• Organization & Capitalization fee: $20
• Maryland Not-For-Profit Development Center Program Fund: $50
• Total: $170

Expedited Options:

• 7-10 business day expedite: +$50
• Same-day online: +$325
• Same-day other methods: +$425

Processing Time:

• Standard (mail): Approximately 30 days
• Standard overall: 6-8 weeks
• Expedited (7-10 days): +$50
• Same-day: +$325 or +$425

Articles of Incorporation

File either:

• Articles of Incorporation for a Tax-Exempt Nonstock Corporation, OR
• Articles of Incorporation for a Nonstock Corporation (standard form)

Your Articles must include:

• Organization name with required corporate designator
• Statement of purpose (must select ONE of 8 statutory purposes):
  • Charitable
  • Scientific
  • Literary
  • Religious
  • Educational
  • Testing for public safety
  • Preventing cruelty to animals/children
  • Fostering international/national amateur sports
• Principal office address in Maryland
• Registered agent name and Maryland address (physical, not PO Box)
• Names and addresses of incorporators (at least 1)
• Names and addresses of initial directors (at least 1)
• IRS tax-exemption language (if using tax-exempt form)

Name Requirements

Your nonprofit name MUST include one of these corporate designators:

• CORPORATION, INCORPORATED, COMPANY, LIMITED
• Or abbreviations: CORP., INC., CO., LTD.

Your name must be "readily distinguishable" from other registered Maryland entities. It cannot suggest operation as a bank, trust, or affiliate of government agencies.

Optional: Reserve your name for 30 days ($25 fee; can renew once before expiration).

Registered Agent

You must designate a registered agent who is:

• Adult Maryland resident, OR
• Business entity authorized to operate in Maryland
• Must maintain physical street address in Maryland (NO PO BOXES)
• Must be available during business hours
• Receives service of process and legal documents

Governance Requirements

Board of Directors

Statutory minimum: 1 director

IRS Requirement: 3 directors minimum for 501(c)(3) approval

Maryland Nonprofits Recommendation: 5-7 independent board members for effective governance

We recommend starting with at least 3 unrelated directors to align with IRS expectations.

Officers

You must appoint at least:

• President
• Secretary
• Treasurer

Additional officers (Vice President, Assistant Secretary, etc.) are optional. Officers must act in good faith and exercise reasonable care in decision-making (fiduciary duty).

Initial Directors Meeting

Maryland law requires an initial directors meeting before or after incorporation to:

• Elect all officers
• Approve bylaws
• Adopt necessary governance documents

This is a mandatory compliance step—document this meeting with minutes.

Bylaws

Bylaws are required by Maryland law but not filed with the state. Your bylaws must address:

• Director composition and qualifications
• Board meeting procedures and frequency (typically quarterly minimum)
• Officer duties and responsibilities
• Committee structure (if any)
• Member voting rights (if applicable)
• Conflict of interest policies (required for 501(c)(3))
• Amendment procedures

Maryland Tax Exemption

State Income Tax

NOT automatic—separate application required.

Process:

1. Obtain IRS 501(c)(3) determination letter
2. Submit request to: Comptroller of the Treasury, Revenue Administration Division, Income Tax Exemption Unit, Room 105, 110 Carroll Street, Annapolis, MD 21411
3. Include: Copy of IRS letter, Articles, bylaws

Fee: No fee

Timeline: NEEDS VERIFICATION (likely 4-8 weeks, but confirm with Comptroller)

Sales Tax Exemption

NOT automatic—separate application required.

Form: Online application via Maryland Tax Connect portal

Website: https://mdtaxconnect.gov/rptp/portal/home/md-sutec/

Processing: May take time for approval

Renewal: Every 5 years

• Renewal notice mailed in May for September 30 expiration
• Due date: August 1 of renewal year
• No fee mentioned

Verification: Organizations and vendors can verify exempt status at https://mdtaxconnect.gov/rptp/portal/home/Verify_Sales_Tax_Exemption/

Property Tax Exemption

NOT automatic—separate application required.

Eligibility: Must have IRS 501(c)(3) status; property must be "necessary for and actually used exclusively" for charitable or educational purpose

Application:

• File with SDAT
• Include: Articles, recent bylaws, detailed facility descriptions, use limitations

Requirement: Property must demonstrate exclusive use for exempt purpose

Acreage Limitation: Maximum 100 acres (outside municipal/Baltimore City); exception for nonprofit hospitals (no limit)

Unrelated Business Income Tax (UBIT)

If nonprofit has over $1,000 in unrelated business income:

• File federal Form 990-T
• File Maryland Form 500
• Both required if threshold met

Ongoing Compliance

Annual Report (Form 1)

Requirement: All Maryland nonprofits must file

Due Date: April 15 annually

Fee: $0 for nonprofits (fee eliminated)

Content:

• Organization information
• Principal office address
• Registered agent information
• Board/officer information
• Personal property tax information (if applicable)

Filing Methods: Online (Maryland Business Express), mail, or in-person

Status: Maintains good standing with state

Charitable Registration (Form COR-92 or COF-85)

Requirement: If organization receives $25,000+ in charitable contributions annually

Exemption: Organizations receiving under $25,000 with no professional solicitors file "Exempt Organizations Fundraising Notice" instead (free)

Initial Registration:

• Form: COR-92 (Charity Registration Statement)
• Fee: Varies by contribution level
• Required documents: IRS letter, Articles, bylaws

Annual Renewal:

• Due: 15th of 4th month after fiscal year end
• Form: COR-92 or COF-85 (if filed 990-N)
• Fee: Depends on contribution level
• Late fee: $25 per month

Professional Solicitors: Different fee structure applies if using professional solicitors ($50 annual fee if under $25,000 contributions)

Federal Form 990

All Maryland nonprofits must file with the IRS:

• Form 990-N (e-postcard) if under $50,000
• Form 990-EZ if $50,000-$200,000
• Form 990 if over $200,000

Due date: 15th of 5th month after fiscal year end (May 15 for calendar-year nonprofits).

Charitable Solicitation Registration

Registration Threshold

$25,000 or more in charitable contributions in a fiscal year

Exemptions (no registration required)

• Religious organizations or affiliated with religious organizations
• Organizations soliciting only from members
• Organizations under $25,000 with no professional solicitors
• Must file "Exempt Organizations Fundraising Notice" within 8 months of fiscal year end (free)

Registration Process

Initial Registration:

• Form: COR-92
• Agency: Maryland Secretary of State, Charitable Organization Division
• Fee: Varies by contribution level
• Contact: charity@maryland.gov or mail to Secretary of State

Required Documentation:

• IRS 501(c)(3) determination letter
• Articles of Incorporation
• Organization bylaws
• Governance information

Key Deadlines and Timeline

Formation Timeline:

1. Verify name availability
2. Prepare Articles (choose 1 of 8 statutory purposes)
3. Appoint registered agent
4. File Articles ($170) with SDAT
5. Hold initial directors meeting
6. Create bylaws and elect officers
7. Obtain EIN from IRS
8. Apply for 501(c)(3) status

Post-Formation (After 501(c)(3) Approval):

• Request Maryland income tax exemption
• Apply for sales tax exemption
• Apply for property tax exemption (if applicable)
• Register for charitable solicitation (if raising $25,000+)

Ongoing Annual Deadlines:

• April 15: Form 1 (Annual Report) to SDAT (free)
• 15th of 4th month after FY end: Charitable registration renewal to Secretary of State (if required)
• 15th of 5th month after FY end: Form 990 to IRS

Important Considerations

Multiple Separate Tax Applications: Maryland requires separate applications for income tax, sales tax, and property tax exemptions. Each has different deadlines and processes. Plan for 2-3 months post-formation to complete all applications.

$25,000 Charitable Solicitation Threshold: Know your organization's contribution level. Organizations over $25,000 must register; under $25,000 file exemption notice instead.

Sales Tax Exemption 5-Year Renewal: Mark your calendar 5 years from initial approval. Renewal is not automatic—May notice, August 1 due date.

Two-tier Annual Reports: Form 1 goes to SDAT (April 15). Charitable registration renewal (COR-92) goes to Secretary of State (15th of 4th month after FY end). Different agencies, different due dates.

$170 Formation Fee: Maryland's incorporation fees are higher than many states due to the Development Center Program Fund component.

Eight Statutory Purposes: You must select exactly one of eight purposes in your Articles. This is restrictive compared to states allowing broader purpose statements.

Initial Board Meeting Required: Hold and document this mandatory meeting with minutes. This is a compliance requirement.

Maryland's multi-step tax exemption process and charitable registration thresholds require careful planning post-formation. While the $170 incorporation fee and multiple applications add complexity, Maryland offers no annual fees for nonprofits and straightforward ongoing compliance.

For expert guidance through Maryland's multi-application tax exemption process, consider the Nonprofit Startup Navigator. Or explore the complete formation guide for self-service formation with detailed checklists.

Questions about Maryland nonprofit requirements? Schedule an Advisory Call with our Maryland nonprofit specialists.