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Required Church Filings with IRS

Question:

What IRS "tax" forms are newly organized churches required to file?

Answer:

Here's a quick checklist to answer this question:

Required: Form SS-4 - Application for federal Employer Identification Number (EIN)

Required: Form W-2 (and related W-3) - Annual Wage and Tax Statement

It Depends: Form 941 - Employer’s Quarterly Federal Tax Return. If the pastor is the only employee and he does not elect voluntary federal income tax withholding, then none is required.

Optional: Form 1023 - Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Churches are automatically income tax exempt, but the Tax Determination Letter issued by the IRS after completion of Form 1023 can be helpful (e.g., to secure a bulk mailing permit with the USPO). Caution! It's 28 pages long and complicated!

Optional, but beneficial: Application for [your State] Sales and Use Tax Certificate of Exempt Status. Many States apparently instruct churches to include a copy of their Tax Determination Letter which is received from the IRS only after filing and acceptance of Form 1023. My State (Wisconsin) does list this letter as required in its instructions for the Certificate, but I've rarely seen a church file Form 1023 and I've never seen a church denied a State sales tax exempt certificate.

Very Rare: Form 990-T - Exempt Organization Business Income Tax Return. This form is for churches to pay income tax on income earned in excess of $1,000 per year that is not related to its tax exempt purpose. It's called Unrelated Business Income Tax (UBIT).

No way: Form 1120 - U.S. Corporation Income Tax Return. While churches are considered corporations, they do not file the corporate income tax return.

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  1. Good information, I will use it! Thank you

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