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Non-Profit LLC = Qualifying Employment?

Total Posts: 1

Joined 2013-02-04

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I currently work at a 501(c)3 non-profit practicing immigration law. I am considering opening up a Professional Limited Liability Company (PLLC) in Texas, but need to know first if the employment will qualify for PSLF.  I want to structure the PLLC as a non-profit (ie, work on a salary, charge on a sliding scale, any profit goes back into the PLLC to serve more clients, mission focused on social justice and serving low-income immigrant communities).  Under Texas state law, PLLCs can form with a non-profit purpose. It looks like while the PLLC is not automatically expempt from state and/or ferderal taxes, LLCs (of PLLCs) can apply for tax-expemt status if they choose. If my PLLC is not a 501c3, could it still qualify for PSLF if I structure it to serve immigrants in Texas (an underserved population, generally poor clients) and set it up as a not-for-profit entity? How can I know for sure? I do not want to quit my job at the 501c3 until I know for sure that my PLLC would be qualifying employment. I am 2.5 years into my 10 years, and have too much debt to get off the PSFL track. I would really really appreciate any help you could provide. THank you!

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Here is a portion of the Texas Secretary of State website on nonprofit LLCs:

Can I form a nonprofit LLC in Texas?

The Texas Business Organizations Code (BOC) does not recognize the term “nonprofit LLC” as describing a specific type of entity, but the BOC does allow for the formation of an LLC with a nonprofit purpose. Although a for-profit corporation is prohibited from “operating a nonprofit institution” (BOC §2.008), the BOC does not impose this prohibition on LLCs. This is one of the few substantive changes introduced by the BOC.
Will an LLC with a nonprofit purpose be tax-exempt?

A Texas LLC that states a nonprofit purpose is not automatically exempt from state or federal taxes. For information on whether the IRS will grant a tax-exempt status to such an LLC, contact the IRS or read IRS Publication 557: Tax-Exempt Status for Your Organization. For information on whether the Texas Comptroller will grant tax-exempt status, contact the Comptroller’s Exempt Organizations Section.

Does the secretary of state have a form I can use to form an LLC with a nonprofit purpose?

No. Form 205 (Word 158kb, PDF 98kb) can be used to create a general purpose LLC, but it is not designed to create an LLC with a nonprofit purpose, and it is not designed to satisfy any requirements that the IRS or Texas Comptroller might impose for tax-exemption. You should consult with your attorney if you want to form a tax-exempt or nonprofit LLC.