What Should 501(c)(3) Churches Know About Form
- Updated August 14, 2023 - 2.00 PM - Admin, Tax990
Organizations that operate towards exempt purposes can get an exemption from the IRS for paying federal income taxes. This applies to various types of nonprofit organizations, including Churches.
This article discusses churches and their 990 filing requirements.
Table of Contents
How does the IRS Define Form 990 for Churches?
The term ‘Church’ is not specifically defined in the Internal Revenue Code (IRC). However, the IRS considers the following organizations as Churches for federal tax purposes.
Integrated Auxiliaries of churches
All other organizations associated with churches
Mosques, Synagogues, and certain other religious organizations
Other Religious Organizations
Religious organizations that are not considered churches may include Nondenominational Ministries, Interdenominational and Ecumenical organizations, and other entities that operate toward the advancement of religion.
How Can Churches Obtain Tax-Exempt Status?
Generally, nonprofit organizations are required to file Form 1023 or 1024 to apply for tax-exempt status from the IRS. However, Churches that meet Section 501(c)(3) requirements are automatically classified as tax-exempt.
Section 501(c)(3) requirements include:
Must be organized and operated specifically for religious, educational, scientific, or other
Should not benefit any private shareholders
Should not be attempting to influence legislation through any activities
Should not interfere in political campaigns
Should not be part of any illegal or other activities that violate fundamental policy
Voluntary Application for Tax-Exempt Status
Even though Churches are automatically qualified as tax-exempt, they can still file Form 1023 or 1024 to improve their recognition among the church leaders and members.
Also, the churches that are recognized as tax-exempt provide more assurance among the public that their contributions are tax-deductible.
Do Churches File a 990 Form?
All the organizations that obtained tax-exempt status from the IRS are required to file 990 form every year to report their financial information, activities, and other details.
However, Churches are exempt from this requirement and are not required to file Form 990 annually. The exception also applies to other organizations affiliated with Churches.
What this also means is that Churches are not subjected to automatic revocation of tax-exempt status even if they fail to file the 990 forms.
Filing Form 990 Voluntarily
In order to improve transparency and integrity among the public and contributors, Churches can file Form 990 voluntarily and make their 990 returns publicly available for inspection.
990 Filing Requirements for Churches and Religious Organizations
There are different variants of Form 990 available. Churches that choose to file 990 and other religious organizations that obtained tax-exempt status are required to file the applicable form based on their
Form 990-N (e-postcard) - If the gross receipts value of a Church is $50,000 or less, they can
file Form 990-N.
Form 990-EZ (Short Form) - If the gross receipts value of a Church is less than $200,000 (and) the value of the assets is less than $500,000, they can file Form 990-EZ.
Form 990 - If the gross receipts value of a Church is $200,000 or more (or) the value of the assets is $500,000 or more, they can file Form 990.
In addition, churches and other religious organizations that generate $1000 or more from unrelated business income must file Form 990-T.
Additional Filing Requirements
Churches that choose to file 990 returns must ensure that they file a complete return with the required 990 Schedules.
Based on their financial status and operations, they may be required to include a few Schedules along with their 990 forms. Learn more about Schedules
Tax 990 is Here to Simplify 990 filings for Churches!
Since the IRS has mandated the e-filing of 990 forms, it’s important for Churches to get started with an e-file provider. That’s where Tax 990 comes in!
Tax 990, an IRS-authorized e-file provider, enables Churches and other religious organizations to complete and e-file their 990 returns easily, securely, and quickly by offering the following helpful features.
Free Schedules - Automatically includes the required 990 Schedules for Free
Multiple Form Preparation Options - Form-Based and Interview-Style filing options for form preparation
Internal Audit Check - Audits your form and notifies you of errors before you transmit to the IRS
Reviewers and Approvers - Provides the option to invite users for form review and approval
Real-time Status Updates - Receive instant updates on forms via email and text notifications if desired
Seamless Customer Support - Resolves questions instantly via live chat, phone, and email.