The benefits of having 501c3 status include exemption from federal income tax and eligibility to receive tax-deductible charitable contributions. To qualify for these benefits, organizations must file an application with, and be recognized by, the IRS. Another benefit is that some organizations may be exempt from certain employment taxes.

Individual and corporate donors are more likely to support organizations with 501c3 status because their donations can be tax deductible. Recognition of exemption under section 501c3 of the IRC assures foundations and other grant-making institutions that they are issuing grants or sponsorships to permitted beneficiaries.

An IRS determination of 501c3 status is often recognized and accepted for other purposes. For example: state officials may grant exemption from state income, sales, and property taxes; and the U.S. Postal Service offers reduced postal rates to certain organizations.

If you have any questions or concerns, please don’t hesitate to contact us.