Special tax rules exist for churches, religious organizations, conventions, and associations of churches in the federal tax system and are defined in the Internal Revenue Code (IRC).
Like a charity organization, churches and various church-controlled organizations are exempt from federal income tax under ICR Section 501(c)(3), which permits such organizations to receive tax-deductible contributions.
To qualify for this exemption, churches and church-controlled organizations must meet these requirements:
• Operate exclusively for religious, educational, scientific, or charitable purposes
• Net income cannot benefit a private individual or stakeholder
• Related activities may not influence legislation
• The organization may not partake in political campaigns
• The organization’s operations can’t be illegal
If these things line up correctly, churches and church controlled organizations are automatically considered tax-exempt and are not required to file tax exemption status with the Internal Revenue Service (IRS).
However, all tax-exempt organizations should have a tax ID number, or what’s called an Employer Identification Number (EIN for short).
If you’re wondering how to obtain your nonprofit Employer Identification Number, you’ve come to the right place.
An EIN will allow your church or church-controlled organization to do several important things, even if the church or auxiliary organization doesn’t currently have any employees.
An EIN will allow your church or church-controlled organization to do the following and more:
• Open a bank account in the name of the organization
• Be listed as a subordinate in a group ruling
• Furnish returns with the IRS, such as Forms W-2 and 1099
For these reasons, it’s important to obtain your nonprofit Employer Identification Number (EIN) whether you’re a church, church controlled organization, convention, or associations of churches including integrated auxiliaries.
Even if you are running a church-controlled organization, you will need a tax ID. There are several reasons that this number is going to help the church. If you have any questions about how the tax ID can benefit your church-controlled organization, contact the IRS.
All churches must have a Church EIN, or a federal tax ID number. You will need to have this number regardless of how many employees work in the church. A church is one of several types of organizations that must have this federal tax ID to distinguish itself.
With the tax ID number, your church will be able to open a bank account and furnish returns, including a W2 and 1099. You can also use this number to be listed as a subordinate in a group ruling.
When you are trying to get a Church Tax ID, you can opt to fill out an online or paper application. An EIN is a nine-digit number that is specific to the organization and stays with the church-controlled organization, so it does not lose its tax-exempt status.
There are several factors that go into whether your church will qualify for an exemption to receive tax deductions. If the organization operates exclusively for religious activities, activities do not benefit legislation, or the organization has legal operations, then it can qualify for the exemption.
When establishing any organization, especially a church for a variety of community services, make sure to learn about the benefits of a tax ID. A tax ID can have a positive short and long-term effect on your business. Apply for a federal tax ID today, and you will immediately see the benefits.