January 27, 2013

MHA gets tax-exempt status

Local organization no longer under state association’s umbrella exemption.

by Sarah Einselen

LOGANSPORT — The Mental Health Association in Cass County received notice Thursday that the Internal Revenue Service approved its application for independent tax-exempt status.

The association was formerly tax-exempt under the umbrella of the state association, but after a paperwork error put the local organization in limbo for a few months in 2012, local leaders decided to seek tax exemption independently of the state organization.

“We’re just ecstatic,” said Kim Waldron, executive secretary of the local association. “We’ve put a lot of time and energy and effort into getting this 501(c)3.”

A notice the association’s accountant, Linda Lantz, received last week states the association’s exemption as a public charity became effective Sept. 6, 2012. That replaces the group exemption under which the association used to operate.

The association had begun the application process for its own exemption last May and had asked the IRS to expedite its application, Lantz had said in November.

“Because of Hurricane Sandy, the Internal Revenue Service has been overwhelmed with applications to set up not-for-profit organizations,” Lantz said last week, “so this has slowed down the application process for everyone.”

United Way held donations to the local association while its tax-exempt status was in question last year. When the IRS reinstated its exemption in November, United Way released $29,507 to the Mental Health Association. All told, the association received $34,882 from United Way in 2012, according to Pam Krysevig, the association’s treasurer.

The local association will rely on the state association to complete its 2012 tax returns, said Krysevig, but for 2013 and on, local association members will file the annual returns themselves.

“Before, we would send a lot of our information, like 990s, to the state, and then they would file our taxes,” she said. When the local association starts filing its own tax forms months from now, it’ll mean significantly more paperwork for local leaders, she added.

Waldron said she expected the new tax-exempt status to cover all United Way contributions for 2013.

“We just want to thank United Way for being patient with us and understanding this is a long process and we were doing everything we could to get to this point,” she added. “The future is looking bright now.”

Sarah Einselen is news editor for the Pharos-Tribune. She can be reached at or 574-732-5151.