Nonprofit Tax Filing for Child Care Organizations
An overview of applying for tax-exempt status, 990 filing requirements, and IRS deadlines.
What Should Child Care Organizations Know About
Form 990 Filing?
- Updated December 22, 2023 - 2.00 PM - Admin, Tax990
Depending on their primary purpose and how they operate, a nonprofit may be classified in a number of ways. Based upon this classification, the IRS provides tax-exempt status for these nonprofits under the corresponding IRC (Internal Revenue Code) section.
Below is more information on how the IRS defines Child Care Organizations, how they can obtain tax-exempt status, and what their 990 filing requirements are.
Table of Contents
How Does the IRS Define Child Care Organizations?
As per the IRC Section 501(k), Child Care Organizations are nonprofit daycare centers that provide substantial care provided for the purpose of enabling individuals to be gainfully employed.
The term gainfully employed represents the parents who are unable to work unless they find another means of caring for their children during the period of their work.
Also, the services offered by these Child Care organizations should be available to the general public.
How Can Child Care Organizations Trusts Apply for
Tax Exemption?
Before the enactment of section 501(k), the Child Care Organizations are required to satisfy the IRS definition of “educational” or “charitable” purpose in order to be eligible for tax exemption under section 501(c)(3).
However, according to the IRS section 501(k), the organization can obtain federal tax exemption if they fulfill the requirements mentioned in the previous section.
They can apply for tax-exempt status by filing,
Form 1023 - Application for Recognition of Exemption Under Section 501(c)(3) of the Internal
Revenue Code.
(or)
Form 1023-EZ (Based on their answers on the eligibility worksheet).
What are the 990 filing Requirements for 501(k) Child
Care Organizations?
Obtaining tax-exempt status doesn’t make the Child Care Organizations exempt from annual tax filing requirements. They are required to file 990 Series forms annually in order to remain compliant with the IRS.
Here are the different types of 990 forms available,
Form 990-N - Child Care Organizations with gross receipts of less than or equal to $50,000.
Form 990-EZ - Child Care Organizations with gross receipts less than $200,000 and assets
less than $500,000.
Form 990 - Child Care Organizations with gross receipts of $200,000 or more (or) assets of $500,000 or more.
Additional Filing Requirements for Child Care Organizations
Schedules - Based on the information reported on their 990 return, Child Care Organizations may be required to attach certain Schedules.
Form 990-T - If the unrelated business income of a Child Care Organization is $1000 or more during the tax year, they must file Form 990-T.
When is the Deadline for 501(k) Child Care Organizations to file Form 990?
990 returns are generally due on the 15th day of the 5th month after the Child Care Organizations’ accounting period ends.
Therefore, if a Child Care Organization follows the calendar tax year, their 990 deadline is May 15th.
Operating on fiscal tax year? Use our due date calculator to find your 990 deadline.
If this deadline falls on a weekend or holiday, the deadline will get pushed to the next business day.
Form 990 Filing Made Simple and Secure for Child
Care Organizations!
Filing 990 returns on time becomes extremely easy with Tax990! The IRS-authorized e-file provider offers a streamlined e-filing solution for Child Care Organizations and other tax-exempt organizations to e-file their 990 returns efficiently.
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