Nonprofit Tax Filing Requirements for Religious and Apostolic Associations
An overview of applying for tax-exempt status and tax filing requirements
What Should Religious and Apostolic Associations Know About Tax Exemption and Form 990 Filing?
- Updated August 14, 2023 - 2.00 PM - Admin, Tax990
Each nonprofit may have a different set of requirements for obtaining tax exemption and annual tax filing, depending on the IRC section under which they are categorized.
This article discusses about Religious and Apostolic Associations, how they can obtain federal tax exemption, and what their tax filing requirements are.
Table of Contents
How Does the IRS Define Religious and Apostolic Associations?
As per the IRC Section 501(d), Religious and Apostolic Associations are organizations that are organized and operated by the members of a church or church groups.
Generally, these organizations or their members follow religious tenets or canon law.
How Can Religious and Apostolic Associations Apply for
Tax Exemption?
In order to be eligible for obtaining tax-exempt status under the IRC Section 501(d), the Religious and Apostolic Associations must fulfill the following criteria.
Must possess a Religious or Apostolic character
Should maintain a common or community treasury
- All the income should be generated internally by community-operated businesses and from the property owned by the organization.
- The income should be placed into a common fund maintained by the organization, and all members should have equal, undivided interests in this common fund.
- The income must be used for the maintenance and support of members.
- The members shouldn’t have the right to claim title to any part thereof.
Should engage in business for member common benefit, i.e., the organization must be supported by internally operated businesses in which all the members have an individual interest.
The members must include their pro rata shares of the taxable income of the organization in their gross income, whether or not it is distributed to them.
Upon fulfilling these requirements, the Religious and Apostolic Associations can file Form 1024 – Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code along with Schedule L to obtain tax-exempt status under 501(d).
Are Religious and Apostolic Associations Required to File Form 990?
No! Religious and Apostolic Associations are not required to file 990 forms as part of their annual tax
filing requirements.
However, Section 6033(a)(1) requires Religious and Apostolic Associations that are exempt under 501(d) to file an annual return, i.e., Form 1065 – U.S. Return of Partnership Income.
The deadline for filing Form 1065 is the 15th day of the 3rd month following the end of the accounting period that the organization follows.
Note:
Though these organizations file Partnership returns, the members aren't entitled to pass through treatment of the organization's income or expenses.
