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As charitable organizations grow, additional financial reporting responsibilities often follow. In Maryland, a major compliance milestone now occurs when a charitable organization receives at least $400,000 but less than $1,000,000 in gross income from charitable contributions during its most recently completed fiscal year.

Effective July 1, 2026, Maryland increased its CPA review threshold from $300,000 to $400,000 and its audit threshold from $750,000 to $1,000,000. Qualifying organizations within the review range generally must submit financial statements reviewed by an independent Certified Public Accountant (CPA) as part of their charitable registration filing. (2026 Maryland Chapter 393)

Understanding these requirements before your filing deadline can help your organization remain compliant while demonstrating financial transparency to donors, grantmakers, board members, and the public.

Whether your nonprofit serves Baltimore, Annapolis, Frederick, Rockville, Columbia, Gaithersburg, Salisbury, or communities throughout Maryland, planning ahead for your financial review can simplify the annual registration process and help avoid unnecessary delays.

Maryland Financial Review Requirements at a Glance

Quick Answer

If your Maryland charitable organization receives at least $400,000 but less than $1,000,000 in charitable contributions during its most recently completed fiscal year, Maryland generally requires a financial review performed by an independent CPA. At $1,000,000 or more, an independent audit is generally required. (Maryland Secretary of State – Registration Instructions)

When Is a Financial Review Required in Maryland?

Maryland bases its CPA reporting requirements on gross income from charitable contributions received during the organization’s most recently completed fiscal year, rather than on total organizational revenue.

For current filings, organizations with at least $400,000 but less than $1,000,000 in charitable contributions generally must submit reviewed financial statements. Organizations with at least $1,000,000 generally must submit audited financial statements. (Maryland Annual Registration Form)

The Maryland Secretary of State requires annual registration information to be submitted within six months after the end of the organization’s fiscal year. A current registration generally receives an automatic extension to the 15th day of the 11th month after fiscal year-end if the renewal is not completed by the original due date. (Maryland Secretary of State – Registering a Charity)

What Is a Financial Statement Review?

A financial statement review is an accounting service performed by an independent Certified Public Accountant in accordance with the AICPA Preparation, Compilation, and Review Standards, which include the Statements on Standards for Accounting and Review Services (SSARS). (AICPA & CIMA – Preparation, Compilation, and Review Standards)

During a review engagement, the CPA primarily performs analytical procedures and inquiries of management to determine whether the financial statements require material modifications. A review provides limited assurance and is substantially less extensive than an audit.

For many Maryland charitable organizations, a financial review satisfies the applicable state reporting requirement while providing donors, grantmakers, and governing boards with additional confidence in the organization’s financial reporting.

Maryland Law at a Glance

Maryland uses charitable contributions to determine whether a CPA review or audit is required. The Secretary of State provides specific calculations for charitable contributions depending on whether an organization files Form 990, Form 990-EZ, or COF-85, and notes that government grants are not treated as charitable contributions for this purpose. (Maryland Secretary of State – Registering a Charity)

The 2026 statutory change raised the review threshold to $400,000 and the audit threshold to $1,000,000, effective July 1, 2026. (2026 Maryland Chapter 393)

Financial Review vs. Financial Audit

Although both engagements are performed by independent Certified Public Accountants, they provide different levels of assurance.

Financial Review

A financial review generally includes:

• Analytical procedures
• Inquiries of management
• Limited assurance
• Lower overall cost than an audit
• For current Maryland filings, generally required when charitable contributions are at least $400,000 but less than $1,000,000.

Financial Audit

A financial audit generally includes:

• Detailed testing of financial records
• Confirmation procedures
• Evaluation of internal controls
• Reasonable assurance
• For current Maryland filings, generally required when charitable contributions are at least $1,000,000.

Preparing for Your Financial Review

Maintaining organized financial records throughout the year can significantly streamline your financial review engagement.

Your CPA will commonly request:

• Statement of Financial Position
• Statement of Activities
• General ledger
• Trial balance
• Bank reconciliations
• Contribution records
• Grant documentation
• Board meeting minutes
• Investment schedules
• Significant contracts
• IRS Form 990

Preparing these records before the engagement begins can reduce delays and help ensure your annual registration renewal is filed on time.

Benefits Beyond Compliance

Although Maryland requires reviewed financial statements once the applicable statutory threshold has been met, many organizations find that the engagement provides benefits beyond compliance.

A professionally completed financial review can help:

• Improve donor confidence
• Strengthen grant applications
• Increase financial transparency
• Enhance board oversight
• Identify accounting issues before they become significant
• Improve internal financial reporting processes

Why Choose ELT CPA LLC?

ELT CPA LLC provides independent financial statement review services for charitable organizations throughout Maryland.

Our team understands nonprofit financial reporting requirements and works closely with organizations of all sizes to complete review engagements efficiently while minimizing disruption to daily operations.

Our services include:

• Independent financial statement reviews
• Nonprofit accounting guidance
• GAAP financial statement assistance
• Annual reporting support
• Remote service throughout Maryland
• Responsive communication throughout the engagement

Whether your organization is preparing for its first financial review or has completed reviews previously, ELT CPA LLC is ready to help.

Frequently Asked Questions

What triggers a financial review in Maryland?

For current Maryland filings, charitable organizations with at least $400,000 but less than $1,000,000 in charitable contributions generally must submit financial statements reviewed by an independent CPA. (Maryland Secretary of State – Registration Instructions)

When is an audit required?

An independent CPA audit is generally required when charitable contributions are at least $1,000,000. (Maryland Annual Registration Form)

Does Maryland use revenue or contributions?

Maryland uses charitable contributions for these reporting thresholds. The Secretary of State provides calculations based on the organization’s federal filing and specifically notes that government grants are not charitable contributions for this calculation. (Maryland Secretary of State – Registering a Charity)

When is the annual registration due?

Annual registration information is generally due within six months after the end of the organization’s fiscal year, with an automatic extension available for organizations with a current registration. (Maryland Secretary of State – Registering a Charity)