What Should Veterans’ Organizations Know About Form
- Updated August 14, 2023 - 2.00 PM - Admin, Tax990
Any nonprofit organization that operates toward charitable, educational, scientific, or any other exempt purpose is eligible to apply for federal tax exemption, including Veterans’ Organizations.
This article discusses the requirements for Veterans’ Organizations to obtain tax-exempt status and their tax
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What are Veterans’ Organizations?
Veterans’ Organizations are organizations that are comprised of a group of people (veterans) who are currently serving or have served in the Armed Forces of the United States.
These organizations are primarily organized and operated toward the welfare of veterans and to provide medical care, benefits, and a variety of essential services to their family members.
According to the IRC section 7701(a)(15), the term “Armed Forces of the United States” includes all regular and reserve components of the uniformed services subjected to the jurisdiction of the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, or the Secretary of the Air Force, and Coast Guard.
How can Veterans’ Organizations Obtain Tax-Exempt Status?
The IRS provides tax exemption for Veterans’ Organizations under two IRC sections, 501(c)(19) and 501(c)(23). Upon obtaining tax exemption, the Veteran Organizations will be exempt from paying federal income taxes.
Tax Exemption under Section 501(c)(19)
In order to be exempt under section 501(c)(19), the Veterans’ Organizations must meet the
Must be organized within the U.S. or any of its possessions
A minimum of 75% of members should be past or present members of the U.S. Armed Forces
Other members should be cadets or are spouses, widows, widowers, ancestors or lineal descendants of past or present members of the U.S. Armed Forces
Must not incur net earnings to benefit any private shareholder or individual
Must be operated exclusively for at least one of the following purposes
- Promoting the community’s social welfare
Assisting disabled and needy war veterans, members of the U.S. Armed Forces, and
- Offering entertainment, care, and assistance to veterans or members of the U.S. Armed Forces who are hospitalized
- Conducting programs to commemorate the memory of deceased veterans and members of the U.S. Armed Forces and comfort their survivors
- Conducting programs for religious, charitable, scientific, literary, or educational purposes
- Sponsoring or participating in patriotic nature activities
- Offering insurance benefits for members or their dependents
- Providing social and recreational activities for members
Organizations affiliated with Veterans’ Organizations and trusts or foundations can also apply for tax exemption under 501(c)(19).
Tax Exemption under Section 501(c)(23)
Veterans’ Organizations may also be eligible for tax exemption under section 501(c)(23) if they meet the following requirements
- Must have organized before 1880
- Must have more than 75 percent of its members as past, or present members of the U.S. Armed Forces
Must have a principal purpose of offering insurance and other benefits to veterans or
Veterans’ organizations can also apply for tax exemption under sections 501(c)(4), 501(c)(7), 501(c)(8), 501(c)(10), and 501(c)(2) based on how they operate.
How to Apply for Recognition of Tax Exempt Status
Veterans’ Organizations that need recognition of tax-exempt status are required to file Form 1024, Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code.
What are the 990 Filing Requirements for Veteran Organizations?
Veterans’ Organizations that have obtained tax exemption from the IRS must file Form 990 Series every year to report their revenue, expenses, assets, activities, and other details required by the IRS.
The 990 form required to be filed by Veterans’ Organizations depends on their gross receipts and assets.
|Form 990-N||Veterans’ Organizations with gross receipts ≤ $50,000|
|Form 990-EZ||Veterans’ Organizations with gross receipts < $200,000 and assets < $500,000|
|Form 990||Veterans’ Organizations with gross receipts ≥ $200,000 (or) assets ≥ $500,000|
Additional Filing Requirements for Veterans’ Organizations
Veterans Organizations that file Form 990 or 990-EZ must also file Form 990-T if they generated an income of $1000 or more through unrelated businesses during the corresponding tax year.
Veterans’ Organizations that file 990 forms may also need to include Schedules for reporting additional information about their activities, contributions, etc.
When is the Deadline for Veterans’ Organizations to File
For every Veterans’ Organization that has obtained tax-exempt status, Form 990 is due by the 15th day of the 5th month after their accounting period ends. If they follow a calendar tax year, the deadline is May 15th.
Operating on fiscal tax year?
Use our due date calculator to find your due date.
If a Veterans’ Organization fails to file a 990 form on or before the deadline, they will be subjected to penalties for each delayed month or a part of the month.
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