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Old 11-01-2017, 01:50 PM
Liz Downs Liz Downs is offline
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Join Date: May 2014
Location: Connecticut
Posts: 1
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Hi Carrie, you are not alone in your frustration with Government subsidized child care. States are low on money and the turnaround time for reimbursement is slow at best.
But, changing from for profit cc to nfp cc will take you some time and you will likely need to involve an attorney.
First, and foremost to achieve the IRS status as a 501(c)3 you will need to establish a charitable cause (religious, educational, scientific, and such). This designation allows for the organization to be able to receive unlimited contributions from individuals, corporations and government entities. Most 501(c)3 organizations are corporations (President, VP, Treasurer, Secty of the Corp) and have a Board of Directors that govern the organization. You will be able to apply and receive grant monies toward your charitable cause.
You will be able to continue to receive income directly from parents as well (perhaps on a sliding scale basis).
The best person to ask would be your CPA on how to establish this IRS designation. They will be able to assess if it is worth your efforts, time and in the end if it will help with your cash flow. Also remember that non-profit, charitable organizations are tax exempt (sales and state tax) but the tax return (IRS990) will be a different tax return than you are used to filing and have differing requirements than that of a for profit entity.

Hope this helps! Call your accountant before you do anything. Conversely, contact a local non-profit child care center in your area and ask them how they are doing and what is required of their organization.
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