Do churches need to file tax returns?
Churches need to file a tax return with the IRS if they fall under Section 501(c)(3) status. With that being said, churches can file Form 990-N, Form 990-EZ, or Form 990 depending on their gross receipts.
Churches Should file Form 990-T if they create gross income from an unrelated business of $1,000 or more for a taxable year.
Form 990-N
Most of the small and informal nonprofits which became 501(c)(3) organizations never realize that they need to report to the IRS every year. These organization can file Form 990-N. Small tax-exempt organizations having annual gross receipts of $50,000 or less can file their annual returns by e-filing Form 990-N.
Form 990-EZ
The Form 990-EZ is used by nonexempt charitable trusts, tax-exempt organizations and Section 527 political organizations for providing IRS with the information as per Section 6033. This form can be filed by organizations whose gross receipts is less than $200,000 and total assets are less than $500,000 at the end of the tax year.
Form 990
Form 990 is the informational tax form which most of the tax-exempt organizations need to file annually. Basically, this form provides the IRS an overview of governance, activities and detailed financial information of the organization. Tax exempt organizations having gross receipts more than $200,000 or total assets more than $500,000 need to file Form 990 on annual basis.
Required Schedule for Churches
In addition, based on the activities of your organization, you might have to file additional information along with filing Form 990-EZ, and this is possible by adding appropriate schedules with 990-EZ to complete your annual filing requirements.
Schedule A
Schedule A is commonly used for giving the necessary information about the public support and public charity status. Now organizations which are described in Section 501(c)(3) should utilize this schedule so that they can provide an explanation for a mission statement and program services that are related to the charitable goals.
Other Schedules which churches need to file with form 990/990-EZ if required
- Schedule B - Schedule of Contributors
- Schedule C - Political Campaign and Lobbying Activities
- Schedule D - Supplemental Financial Statements
- Schedule F - Statement of Activities Outside the United States,
- Schedule G - Supplemental Information Regarding Fundraising or Gaming Activities
- Schedule I - Grants and Other Assistance to Organizations, Governments and Individuals
- Schedule J - Compensation Information
- Schedule K - Supplemental Information on Tax-Exempt Bonds
- Schedule L - Transactions with Interested Persons
- Schedule M - Noncash Contributions
- Schedule N - Liquidation, Termination, Dissolution, or Significant Disposition of Assets
- Schedule O - Supplemental Information of Form 990 & Form 990-EZ
- Schedule R - Related Organizations and Unrelated Partnerships
What type of churches are exempt from filing form 990?
The following are the churches which are exempt from filing Form 990 -
- An integrated auxiliary of a church
- A church, an interchurch organization of local units of churches, an association or convention of churches
- A church-affiliated organization which is extensively engaged in maintaining retirement programs or managing funds.
- Church-affiliated mission societies, especially if about more than half of the activities are just conducted in or directed at an individual in foreign countries.
- A school which is below the college level and affiliated with churches or operated by religious orders.
- An apostolic or religious organization which is described in section 501(d)
- Any exclusively religious activity of any religious order.
