Corporate Transparency Act Creates New Federal Reporting Requirements for Business Owners

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As we move towards closing out the year, non-profits across the Commonwealth are learning that new legislation recently signed into law by Governor Maura Healy now brings them significant relief from filing requirements that previously existed. The new law raises the thresholds for requiring a financial statement review or audit as part of the annual filing of a non-profit’s Form PC with the Massachusetts Attorney General’s Office. Under the new law, with regard to combined gross annual receipts: • The threshold for a financial statement review has increased from $200,000 to $500,000. • The threshold for a financial statement audit has increased from $500,000 to $1,000,000. Previous to the new legislation, many smaller non-profit organizations, already struggling for resources, were burdened with the time and cost of undergoing a financial statement review, or an audit. This was especially true for some non-profit organizations with gross annual receipts that were barely over the old thresholds. The new law provides some welcome relief for such non-profit organizations, and especially those with limited resources. Many non-profits who have gross receipts that are over $500,000 but below the new $1,000,000 threshold can now qualify for a review and will no longer need an audit, which is generally more time-consuming and costly. Similarly, smaller non-profits that previously were required to have a financial statement review under the old law will now get relief from both an audit and a review if their combined gross receipts are under $500,000. The effect of the new law is immediate for all non-profits across Massachusetts, because Governor Healy has signed an emergency preamble. This means that the thresholds apply for any filings that have not yet been made. Additional information about the new law can be found here: