The 501(c)(3) application is a critical next step in organizing your nonprofit after your Articles of Incorporation are filed. This IRS application is needed to gain tax-exempt status for your organization, including the ability for contributors to your nonprofit to make tax-deductible donations. 

 

 

501(c)(3) Tax Exemption for Nonprofits

Section 501(c)(3) of the IRS code exempts payment of federal income taxes for charitable, religious, scientific, literary and educational organizations. It is the most commonly used section in the IRS code granting tax exemption. Section 501(c)(3) covers organizations formed for the following purposes: 

 

 

1. Charitable organizations provide services beneficial to the public interest. Examples include battered women's shelters or low-cost medical clinics.  

 

 

2. Religious organizations are valid as long as the organization's directors, officers and members appear to truly and sincerely hold the values and beliefs espoused by the religion. 

 

 

3. Unless a nonprofit corporation files a 501(c)(3) application with the IRS, it will not be exempt from paying federal income taxes. If your nonprofit's purpose qualifies under 501(c)(3), then DP BUSINESS can help create the application for you.

 

The Benefits

 

• Income earned by the organization is exempt from federal income tax

• Donations are tax deductible for donors

• Qualification to receive private and public grants

• Lower postage rates on corporate mailings

• Reduced rates for radio and public service announcements in the local media

• Credibility in the nonprofit community

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*If your nonprofit's income averages less than $10,000 over a 3 year period, the filing fee is $400. If your nonprofit's income averages more than $10,000 over a 3 year period, the filing fee is $850.