New NP! What happens if 501c app isn’t approved until next fiscal year?

Hey guys, I recently started helping a friend with an NP (in full start-up mode). They were super lucky in that they received a nicely-sized grant in order to get the org and concept of their built project – essentially a mini-museum serving a specific community – off the ground.

I have experience starting businesses but this is my first foray into the NP world. And after doing a deep dive in the last few weeks, they/we, I’m realizing, are a bit behind in that 2-3 people have been informally hired as contractors and have not incorporated in our state yet. I understand the steps of what needs to happen between now and 501c process w/in our state and w/ the IRS – and that we need to move on things ASAP – but the long wait period for 501c apps worries me.

If the app is approved in 2023, what are the implications for tax filing for 2022 (if any)? I understand reporting req’s are due in May and just want to make sure the year the app was submitted, not approved, is what matters.

Thank you from a newbie!

submitted by /u/venetiarum_ny
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