Form 990 Tax Filing for 501(c)(3) Public Charities
Learn about 990 filing requirements, obtaining tax-exempt status, and your 990 deadline
What Should 501(c)(3) Public Charities Know About Form
990 Filing?
- Updated August 14, 2023 - 2.00 PM - Admin, Tax990
The IRS provides nonprofit organizations with an exemption from paying federal taxes under Section 501(c)(3). Generally, 501(c)(3) organizations are classified either as Public Charities or Private Foundations
In this article, you can find detailed information about 501(c)(3) public charities and their tax filing requirements.
Table of Contents
How does the IRS define Public Charities?
Public charities are organizations that operate towards furthering any exempt purposes and have obtained tax-exempt status from the IRS under section 501(c)(3).
Generally, the IRS classifies the following organizations as public charities,
Churches, Hospitals, Qualified medical research organizations affiliated with hospitals, Schools, Colleges, and Universities
Organizations that have an active program of fundraising and receive contributions from various sources such as the general public, governmental agencies, corporations, private foundations or other public charities
Organizations that generate income by conducting activities that further the organization’s
exempt purposes
Organizations that are involved in a supporting relationship to one or more existing public charities.
Public Charities Vs Private Foundations
The major difference between public charities and private foundations is their source of funding. Public charities receive contributions primarily from the public, whereas private foundations receive the majority of their contributions from any single private source.
How Can I Obtain 501(c)(3) Public Charity Status?
In order to qualify as a 501(c)(3) public charity, the organization must file Form 1023, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.
They can also file Form 1023-EZ if their gross receipts are < $5,000 in a taxable year and if they answer “No” to all the questions on the eligibility worksheet.
Note:
Churches and other related organizations are automatically qualified as tax-exempt and are not required to file Form 1023.
Requesting Public Charity Status
Organizations that need to be classified as public charities must mention the type of public charity status they require on Form 1023, Part X. Organizations that qualify as public charities are generally categorized under the following types:
Type A: Organizations That Engage in Inherently Public Activity (IRC 509(a)(1) and
IRC 70(b)(1)(A)(i)-(v))
- Churches
- Educational Institutions
- Hospitals and Medical Research Organizations
- Certain Organizations Related to Colleges and Universities
- Governmental Units
Type B: Publicly Supported Organizations (IRC 509(a)(1) and 170(b)(1)(A)(vi); IRC 509(a)(2))
- Organizations that receive the majority of support from a Governmental unit or General public
- Organizations supported by Exempt Function Income
Type C: Supporting Organizations (IRC 509(a)(3))
- Organizations that provide support to other public charities in furthering their exempt purposes
Type D. Organizations That Test for Public Safety (IRC 509(a)(4))
- Organizations that operate specifically to test public safety
What are the Tax Filing Requirements for 501(c)(3) Public Charities?
Organizations that obtained 501(c)(3) public charity status are required to file Form 990 annually to report their financial information, activities, and more.
There are different form variants in the Form 990 series. Public charities are required to file the applicable one based on their gross receipts and assets.
Form 990-N - Public Charities with gross receipts less than or equal to $50,000
Form 990-EZ - Public Charities with gross receipts less than $200,000 but greater than $50,000 (and) assets less than $500,000
Form 990 - Public Charities with gross receipts equal to or greater than $200,000 (or) assets equal to or greater than $500,000
Along with these, Public Charities with an unrelated business income of $1000 or more during the corresponding tax year must file Form 990-T.
Additional Filing Requirements for Public Charities
Public charities that file 990 forms must attach Schedule A to provide additional information regarding their public charity status. They may also be required to include a few other Schedules. Learn More
Deadline to File 990 Forms for Public Charities
Generally, public charities must file Form 990 on or before the 15th day of the 5th month after their accounting period ends. This means public charities that follow the calendar tax year must file Form 990 by May 15th.Operating on a Fiscal tax year? Find your 990 due date
Penalties and Automatic Revocation
Public charities that fail to file 990 forms on time may be subjected to penalties of $20 - $110 for each delayed month. If public charities fail to file 990 forms for three consecutive years, they may face automatic revocation of tax-exempt status. Learn more about penalties
Public Support Test Qualifications
Organizations that are classified as Public Charities under section 501(c)(3) must qualify in the public support test and report their qualification in Form 990 Schedule A.
What is the Public Support Test?
The public support test is a method used by the IRS to measure the public support received by an organization over a five-year period to determine whether it’s eligible to be classified as a public charity.
There are two different public support tests:
509(a)(1) Test - For organizations described in IRC sections 509(a)(1) and 170(b)(1)(A)(vi)
509(a)(2) Test - For organizations described in IRC section 509(a)(2)
509(a)(1) Test - For Organizations Described in IRC sections 509(a)(1) and 170(b)(1)(A)(vi)
The organization will be recognized as a public charity if they meet at least one of the following conditions
Receives 33 ⅓ or more of its total support from governmental agencies, the general public, and other public charities.
Receives 10% or more of its total support from governmental agencies, the general public, and other public charities under facts and circumstances indicating that the organization is publicly supported.
509(a)(2) Test - For organizations described in IRC section 509(a)(2)
The organization must meet both of the following conditions to be qualified as public charity
Receives more than 33.33% of the contributions from the general public and/or from gross receipts from activities related to the tax-exempt purposes.
Receives less than 33.33% of the contributions from gross investment income and unrelated business taxable income.
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