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Does Your Church Have to File a Form 990?
Most churches do not have to file a Form 990, but there are real exceptions, and most other non-profits are required to file. Here is how to know where your organization stands.
Churches are generally exempt
The IRS generally does not require churches to file an annual Form 990. This is one of the few areas where churches are treated differently from other non-profits.
According to the IRS guidance for churches and religious organizations, churches that meet the tax code’s definition are automatically considered tax-exempt and are not required to file annual returns.
What counts as a church
The IRS looks at a set of characteristics, not a single test: a distinct legal existence, a recognized creed and form of worship, a regular congregation, regular services, and ordained ministers, among others. The IRS Tax Guide for Churches and Religious Organizations (Publication 1828) lays these out in detail.
The exceptions that catch people
- Unrelated business income. If your church earns significant income from activities unrelated to its mission, it may need to file Form 990-T and pay tax on that income.
- Church-affiliated organizations. Separate non-profits connected to a church, such as a school or a foundation, may have their own filing requirements.
- Voluntary filing. Some churches choose to file or publish financials for transparency, even when not required.
Most other non-profits must file
If your organization is a non-profit but not a church, you very likely have to file annually. Which version depends on size:
- Form 990-N (e-Postcard) for the smallest organizations.
- Form 990-EZ for mid-sized organizations.
- Form 990 for larger organizations.
See the IRS overview of Form 990 for current thresholds.
The cost of getting it wrong
Staying ready either way
Whether or not you file, keeping your books clean, reconciled and organized by fund means you are always prepared. Our non-profit bookkeeping service keeps your net assets and functional expenses 990-ready all year long.