Have you taken steps to ensure that your charitable contributions are tax deductible? To be eligible for such favorable status, the organization must be qualified with the IRS as a “section 501(c)(3)” organization. Qualified tax-exempt organizations include religious institutions, social service providers, schools, and many others.
Merely organizing the legal entity as a nonprofit corporation does not alone guarantee the entity is a “qualified organization” to receive tax-deductible contributions. Subject to a limited number of exceptions, the entity must apply to the IRS for such status and receive a formal IRS approval.
How can you tell if your charity is a qualified organization? There are several ways:
- Go to IRS.gov, click on “Tools” and then on “Exempt Organization Check.” Reviewing this website will provide you, as the donor, with the greatest level of protection for ensuring your donation will be provided to a qualified organization.
- Contact the IRS at 1-877-829-550, or 1-800-829-4059 for TTY/TDD equipped phones.
- Visit www.guidestar.org for a comprehensive list of qualified organizations and their recently filed IRS Form 990s. Note that this website cannot be relied by the donor to ensure that an organization is currently qualified.
If you don’t see your charity listed – don’t panic. Some organizations are automatically qualified, like churches and their auxiliary institutions. Other organizations are covered by a parent organization’s “group exemption.” If you have questions or are unsure whether an organization is qualified, contact the organization to inquire further.
You may also check further the state attorney general’s office, which is generally charged with regulating and overseeing charities that solicit contributions from the residents in their state. As with automatic IRS qualification, though, many religious organizations are exempt from state attorney general registration requirements.