ExpressTaxExempt Blog

Form 990 for Churches

What’s the deal with churches and Form 990?

We’re gonna run you through the basics. Try to keep up, there’s a quiz afterward!

Churches and Associations of Churches

Small tax-exempt organizations that have less than or equal to $50,000 gross receipts are required to file a Form 990-N (e-Postcard) every year. You know this already.

But there are exceptions to this rule. For example, churches, their integrated auxiliaries, and conventions or associations of churches aren’t required to file.

Affiliation with the Churches

In order for an exemption to remain, your church has to have the majority control or be the majority financial supporter of its integrated auxiliaries’ governance.

If your church financially invests only 25% into an auxiliary group, that program or group will still have to annually file if they want a tax-exempt status.

It doesn’t matter that program or group is in direct affiliation with your church.

Integrated Auxiliaries

In the IRS Publication 1828, Churches and Religious Organizations (PDF link), you can find information about an integrated auxiliary of a church.

What you’ll want to find is how affiliation can be recognized by the IRS through facts and circumstances other than a church's majority control over the auxiliary's governing body.

Unrelated Business Income

For most organizations, an activity is an unrelated business, and subject to unrelated business income tax, if it meets three requirements: It is a trade or business, it is regularly carried on, and it is not substantially related to furthering the exempt purpose of the organization.

Filing Requirements & Group Returns

If it is required to file an annual return, the organization must file its own separate return but may also file a group return on behalf of some or all of its subordinates.

What is a group exemption? It allows the central or parent organization to confirm that its subordinates are eligible for exemption and to include each subordinate under its cover for tax-exempt purposes.

Ready for the quiz? Well, we’ll let you off easy this time.

If you have any questions, call our e-filing experts at 704.839.2321.

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Find answers related to e-filing IRS Form 990, 990-EZ, 990-PF, 990-N (e-Postcard), Form 1120-POL and Extension Form 8868 with our Frequently Asked Questions.

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