Tax 990

Nonprofit Tax Filing Requirements for State-Sponsored Workers' Compensation Reinsurance Organizations

An overview of applying for tax-exempt status, 990 filing requirements, and IRS deadline.

What Should State-Sponsored Workers' Compensation Reinsurance Organizations Know About Tax Exemption and Form 990 Filing?

- Updated August 14, 2023 - 2.00 PM - Admin, Tax990

For the purposes of granting federal tax exemption to nonprofit organizations, various IRC sections have been established by the IRS. Depending on the organization’s type, operation purpose, and a few other factors, the IRS classifies a nonprofit under the corresponding section.

This article details how the IRS defines State-Sponsored Workers’ Compensation Reinsurance Organizations, how they can obtain tax exemption, and what their tax filing requirements are.

How Does the IRS Define State-Sponsored Workers' Compensation Reinsurance Organizations?

Per the IRC Section 501(c)(27), State-Sponsored Workers’ Compensation Reinsurance Organizations are:

Organized and operated by state law exclusively for the purposes of providing reimbursements to its members for losses under workers’ compensation acts.

How Can These Organizations Apply for Tax Exemption?

State-Sponsored Workers’ Compensation Organizations seeking tax-exempt status under section 501(c)(27) must file Form 1024 - Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code (IRC).

In order to be eligible for this exemption, State-Sponsored Workers’ Compensation Reinsurance Organizations must fulfill certain requirements established by the IRS (the section and requirements may vary based on the year when the organization was formed):

For Organizations Established Before June 1, 1996 - Section 501(c)(27)(A) Requirements

For Organizations After December 31, 1997 - Section 501(c)(27)(B)

What are the 990 filing Requirements?

The State-Sponsored Workers' Compensation Reinsurance Organizations that obtained tax-exempt status under section 501(c)(26) must file 990 Series Forms every year to report the information required by the IRS.

It’s important that the organization choose and file the appropriate 990 forms based on their gross
receipts and assets.

If the organizations with gross receipts of $50,000 or less should e-file Form 990-N.

If the Organizations with gross receipts less than $200,000 and assets less than $500,000 should
e-file form 990-EZ

If the organizations with gross receipts of $200,000 or more (or) assets of $500,000 or more should e-file form 990.

Additional Filing Requirements

Based on the details reported on Form 990 or 990-EZ, the organizations may be required to attach certain Schedules for reporting additional information.

If the unrelated business income of the organization is $1000 or more, they should if their
e-file Form 990-T.

When is the Form 990 Deadline for These Organizations?

Generally, the due date for filing 990 returns is the 15th day of the 5th month after the end of the accounting period, followed by the organization.

This means May 15th is the deadline for organizations following the calendar tax year.

Operating on a Fiscal Tax Year? Find your 990 due date.

If this deadline falls on a weekend or a holiday, then the next business day will be the deadline.

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