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IRS Form 990 Filing Requirements for Churches- Updated April 23, 2021 - 8.00 AM - Admin, ExpressTaxExempt
IRS recognizes the churches under the section 501(c)(3) as tax-exempt. This type of Organization does not pay income tax on its earnings or on the donations it receives. But the Organizations need to file the activities of the Organization with the IRS.
This article further explores the requirements for activities of the Churches, applying for a tax-exempt status, filing requirements, and more.
Table of Content
1. What is the church?
A church is usually a religious organization that operates to be an important part of the religious group of the public in a particular location. The IRS recognizes all the places of worship like temples, and mosques as churches regardless of their faith. The term “church” also includes the associations of churches, conventions of churches, and integrated auxiliaries.
The churches and the organizations associated with the churches are considered public charities. Just like all other charitable organizations, churches are also required to meet the requirements of section 501(c)(3) of the IRS to qualify for the tax-exempt status.
The primary purpose of the organization should be to operate for a charitable purpose recognized by the IRS. The organization must not involve in political activities and lobbying must not be considered as an important activity of the organization. The net income or the gross receipts of the organization must not be earned by the owner or the shareholders of the organization. These are some of the requirements that need to be met by the organization to qualify for the tax-exempt status.
2. Examples of IRS considered churches
Because of the federal tax purposes, the IRS recognizes the term “church” as the following:
- Temples, Mosques, Churches and other places of worship.
- Religious organizations.
- Church conventions.
- Church associations.
- Auxiliaries of church.
- All other organizations associated with the churches.
3. Unique Church activities
A church that meets the requirements of section 501(c)(3) of the IRS is automatically considered as a tax-exempt organization and is not required to file Form 1023 to recognize its tax-exempt status. Just like all the other public charities, the church also depends upon the donations of the public to organize and operate its charitable programs.
Religious organizations like non-denominational ministries and organizations whose main purpose is to study or advance religion will not be considered as churches but can obtain a section 501(c)(3) tax-exempt status. These organizations, like the other public charities, have to file Form 1023 to obtain its tax-exempt status.
4. What is your affiliation with the church?
If you’re affiliated with a church or an association of churches, your application to the IRS will need you to describe by what actions your affiliation is demonstrated through the churches. Basically, you need to be able to convey how you are financially associated with religious institutions to the IRS.
5. Do churches need to file for an exemption?
Churches, including auxiliaries, conventions, and associations of churches, that meet the requirements of section 501(c)(3) of the Internal Revenue Code are automatically considered tax exempt and do not need to apply for and obtain recognition of exempt status from the IRS. Additionally, since churches and certain other religious organizations are not required to file an annual return or notice with the IRS, they are not subject to automatic revocation of exemption for failure to file.
6. What types of churches need to File 990?
Churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of section 501(c)(3) of the Internal Revenue Code are automatically considered tax exempt and are not required to apply for and obtain recognition of exempt status from the IRS. Donors are allowed to claim a charitable deduction for donations to churches that meet the Section 501(c)(3) requirements.
7. Which 990 Form Should Churches File?
With that being said, churches can file Form 990-N, Form 990-EZ, or Form 990 long depending on their gross receipts. On the form, a church provides information on the activities and policies of its charitable facilities that it operated during the tax year. This includes facilities operated either directly or through disregarded entities or joint ventures.
Tax-exempt charitable organizations that have gross receipts of $50,000 or less
file a Form 990-N (e-Postcard) if they chose not to file Form 990 or Form 990-PF. Organizations whose gross receipts vary from year to year can file a Form 990-N if the average of their gross receipts is $50,000 or less for the previous three consecutive years.
For the Organizations whose gross receipts are less than $200,000 and total assets less than $500,000 at the end of the taxable year are supposed to file Form 990-EZ.
Tax-exempt charitable organizations whose gross receipts are equal to or higher than $200,000 and total assets equal to or greater than $500,000 at the end of the taxable year are supposed to file Form 990.
8. What type of churches are not required to file Form 990?
Churches, associations of churches, integrated auxiliaries of churches, and foreign religious missions are exempt from filing Form 990, 990-EZ, or 990-N, regardless of their size. These religious organizations are exempt from federal income tax as 501(c)(3) organizations whether they file an application for exemption with the IRS or not. In addition, while the IRS does revoke the exempt status of most nonprofits that fail to file their Form 990 Series, that is not the case for churches.
9. Choose ExpressTaxExempt to file your Form 990 for Churches
To file form 990 for Churches, get started with ExpressTaxExempt, an IRS authorized e-file provider of 990 returns. We support Form 990, 990-EZ, 990-N, 990-PF, 8868 and 990 amendments. Our system will walk you throughout the process and help you complete your filing without any hassle. All you have to do is to simply create an free account and search your EIN. From there you can choose the tax year and continue to add your Form details.
Know more about ExpressTaxExempt and why you have to choose us for filing your 990 return.