How to Start a School in New York State

Review the Manual for New Administrators of Nonpublic Schools, which includes a chapter on New Schools.

The Checklist

Reserve a name with New York's Secretary of State, Division of Corporations. Go to

Select individuals to serve on its board of directors.

Designate officers to serve on the board.

Develop a mission statement.

Develop a nonprofit operating plan, which is like a business plan for nonprofit organizations, and includes a description of the organization’s location, staffing, activities, funding, fundraising plan and budget.

Establish board committees (e.g., executive committee; finance committee; fundraising committee; volunteer committee; etc.).

Create by-laws.

Retain a bookkeeper to create accounting records and financial reports.

Retain an accountant for annual audit and mandatory government filings.— Organizations with gross revenues greater than $250,000 must undergo a financial audit by an independent CPA.  Those with revenues between $100,000 and $250,000 must file a CPA’s review report.  Those with revenues below $100,000 are not required to retain a CPA, but must submit a financial report certified by its board with its CHAR 500 to the NYS AG’s office.

Incorporate or form a trust to protect its founders and principals from personal liability:

Hold its first corporate meeting and elect corporate directors and officers and adopt corporate by-laws.

Apply to IRS for an employer identification number (E.I.N.):

Establish a bank account and establish check signing procedures.

Designate which officer(s) have the power to sign checks.

Apply for IRS 501(c)(3) tax exempt status (IRS Form 1023) and receive IRS Determination Letter or advanced ruling All organizations that have gross receipts of $5,000 or more must receive an IRS Determination Letter.

— Organizations with gross receipts greater than $25,000 (on a three year average) must file IRS Form 990 annually.  Those with gross annual revenues of less than $100,000 may file Form 990 EZ.  Beginning in 2007, those with receipts of less than $25,000 will be required to complete an online filing with the IRS. Organizations having $1,000 or more in income from activities unrelated to their tax exempt purpose (UBIT) must file Form 990 T. IRS forms and instructions are at

File for state and local tax exemptions: from New York State corporate tax (Form CT-247); New York State and local sales tax (Form ST-119.2); and the New York City General Corporation Tax:  A variety of other exemptions are also available, if applicable, including exemptions from state and local property tax and from certain New York City water and sewer charges. If the organization owns real estate, it should apply for property tax exemption by filing the Exemption From Real Estate Taxation for Property for Property Owned by Nonprofit Organizations form available at

Register with the Charities Bureau of the Attorney General's Office (Form CHAR 410):— Annually, thereafter, the organization must file Form CHAR 500 with the AG's office. Publication CHAR 023 provides a summary of registration and filing requirements. Forms and instructions for the Charities Bureau of the New York State Attorney General are at


Obtain an Employer Registration Number (ERN) from New York State for reporting unemployment insurance, withholding and wage data  Download Form NYS-100 from

Establish financial management, auditing and internal control systems.

Set up a chart of accounts to record financial transactions.

Establish a general ledger and bookkeeping system (either manual or computerized) to account for cash receipts and cash disbursements, assets and liabilities.

Compose job descriptions for staffing needs.

Hire staff and set compensation levels.

Prepare a personnel manual.

Establish a payroll system (manual or automated), including: (a) Withholding requirements (federal, state & city); (b) Requirements for payment of funds withheld (federal, state & city); (c) Reporting requirements for funds withheld (federal, state & city).

Determine whether individuals performing services for it are employees or independent contractors.

Establish a system for preparing and filing Form W-2s for employees and 1099s on behalf of independent contractors.??— W-2s and 1099s:  Employers or their payroll service must provide W-2s for each employee, and 1099s for independent contractors paid $600 or more in a calendar year.  IRS Form 1096 correlates to 1099 information, and Form W-3, Transmittal of Wage and Tax Statements, covers W-2 data. IRS forms are at— If you have payroll, you must remit Federal and FICA (employer and employee) withholding payments, and NYS/NYC withholdings.  The filing frequency is based on the size of your payroll.  A reputable payroll service provider can provide this service and will assume the liability for failure to pay withholdings.

Establish a mandatory system for maintaining records for each employee which include (1) names and social security numbers, (2) W-4 and I-9 forms, and (3) for each payroll period the: (a) beginning and ending dates, (b) the days (weeks, etc.) each employee worked and the earnings for each day (week, etc.) and (c) all payments made to the employee, including bonuses and vacations. — I-9’s: Employees must complete and submit Form I-9, Employment Eligibility Verification, within 3 days of employment to their employers.  I-9s are not filed with the U.S. government.  Employers are required to retain I-9s for up to 3 years. Go to US Citizenship & Immigration:

Establish a system to meet mandatory insurance requirements: (1) Workers' Compensation, (2) Unemployment insurance, (3) Short-term Disability, (4) Auto Liability (if applicable), and (5) [Others].

New York State law requires employers to provide short term disability and workers' compensation coverage to employees.  Many organizations obtain these coverages through the New York State Insurance Fund, although there are alternatives. The State Insurance Fund is at

Unemployment Insurance payments are based on gross payroll and are remitted quarterly to the NYS Unemployment Insurance Division.  Nonprofits are exempt from Federal Unemployment Tax. The NYS Unemployment Insurance division is at

Procure necessary insurance coverage: general liability, property, professional responsibility (if applicable), sexual abuse (if applicable) and non-owned auto liability (if applicable).

Determine whether Directors & Officers (D&O) liability insurance is needed. See Directors and Officers Liability Insurance: Do all nonprofit organizations need Directors and Officers Liability Insurance? at for guidance.

Establish a system for providing receipts for donations to comply with IRS substantiation requirements.  Download IRS Publication 1771, Charitable Contributions Substantiation and Disclosure Requirements, at

If the organization is getting donations and giving something in return, the organization should create a “quid pro quo” disclosure statement informing donors that the amount of the contribution that is tax deductible is limited to the difference between the amount of the contribution and the value of goods or services received in exchange (which should be estimated in a document given to the donor). 

Procure health benefits for employees.

Establish a retirement plan for employees.

Rent or purchase office space.

Lease a postage meter and apply for a nonprofit permit number in order to mail at the reduced nonprofit bulk rate.

Lease or buy computer equipment that is capable of email and accessing the internet.

Lease or buy office equipment: copy machine, fax machine, desks, chairs, file cabinets, conference room tables and chairs, coffee maker, etc.

Copyright 2006 Nonprofit Coordinating Committee of New York, Inc.


NYSAIS Events Registration
    • May 13, 2021 Diversity Practioners Conference 2021: Divesting from Systems of Oppression, Investing in Communities of Transformative Freedom 10:00 AM to 4:00 PMeSeminar
      This event will meet over three separate days: May 13, 19, and 21, 2021 from 10 a.m.-12 noon; and 4-6 p.m. on each day
      Online via zoom
      Keynote speakers: adrienne maree brown and Yolanda Sealey Ruiz
      Presenters: Franny Choi, Dr. Adam Falkner, Carlos Andrés Gómez, Lauren Whitehead
      Audience: Equity and Diversity Practitioners (Directors, Coordinators, Liaisons, etc.), Members of Equity and Diversity Committees/Councils

      Hosted by NYSAIS Diversity Committee

      Details and registration here.
    • May 13, 2021 Grading for Equity: What It Is, Why It Matters, and How It Can Transform Schools and Classrooms 4:00 PM to 5:30 PMeSeminar
      Online via zoom
      Presenter: Joe Feldman and Dr. Shantha Smith, Crescendo Education Group
      4:00 p.m. to 5:30 p.m.
      Audience: Middle and Upper School teachers and administrators
      Details and registration here.
    • May 17, 2021 Finishing Well - Retiring from Schoolwork During a Pandemic 4:00 PM to 5:30 PMeSeminar
      Online via zoom
      Presenter: Jennifer Bryan, Re-Set School
      4:00 p.m. to 5:30 p.m.
      Audience: School personnel who are retiring in 2021
      Details and registration here.
    • May 18, 2021 Community Matters: Advisory Program 4:00 PM to 5:30 PMeSeminar
      Online via zoom
      Presenter: Katie Leo, Facing History and Ourselves
      4:00 p.m. to 5:30 p.m.
      Audience: Teachers and Administrators, grades 5-12
      Details and registration here.
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© 2013 New York State Association of Independent Schools

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17 Elk Street (First Floor)     Albany, NY 12207     Tel: 518-694-5500     Fax: 518-694-5501

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