THIS DOCUMENT IS FOR EDUCATIONAL PURPOSES ONLY. EACH LEGAL SITUATION IS VERY FACT SPECIFIC AND UNIQUE TO EACH INDIVIDUAL ORGANIZATION. THUS, WHILE THIS DOCUMENT WAS PREPARED BY AN ATTORNEY, THE ACCURACY OF THE INFORMATION AND THE PROCESS IS NOT WARRANTED. THIS DOCUMENT SHOULD BE CONSIDERED A GUIDE AND SHOULD NOT BE CONSIDERED A SUBSTITUTE FOR ACTUAL, ONE-ON-ONE LEGAL ADVICE. FOR ACTUAL LEGAL ADVICE, YOUR ORGANIZATION SHOULD CONTACT AN ATTORNEY.
Tax ID (Employer Identification Number)
Any student organization collecting dues or income of any type are required to have a bank account. In order to set up your bank account, you must apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The EIN application is located on the SS-4 form. You may apply through the following links:
Some student organizations choose to apply for tax exempt status through the IRS. The most common type is a 501(c)3. Non-profit organizations have benefits such as exemption from state sales tax, the ability for donors to write off their charitable contributions, etc. The non-profit process is time consuming and does require additional fees for application. Organizations wishing to apply for non-profit status may find more information on the
For organizations not classified as non-profit, it is important to ensure your organization your organization is filing or paying taxes as appropriately outlined by the IRS. If the student organization reports less than $5,000 on their “gross receipt", regardless of the organization's classification, it will automatically be considered tax-exempt and will not need to file annually with the IRS. A “gross receipt" is defined by the IRS as “the total amounts the organization received from all sources during its annual accounting period." Note that this number is calculated before subtracting any costs or expenses. Also note that this number includes student activity fee money, donations later re-donated to a charity, dues collected from members, etc. Thus, most forms of money taken in by the organization count against this $5000 limit.
If a Student Organization receives $5,000 or more during an annual accounting period, it must file annually with the IRS. The proper form for an organization depends on how much more than $5,000 the organization takes in. See below for forms that should be completed by organizations:
<$5,000 annually- No Form
$5,000 up to $50,000- IRS Form 990-N
$50,000 up to $100,000- IRS Form 990-EZ
$100,000+- IRS Form 990
If you are uncertain about your tax situation or have any questions, contact the IRS directly.