WHY DO YOU NEED 501(c)?

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WHICH 501(c) IS RIGHT FOR YOU?

501(c)(3)

May accept tax-deductible charitable donations
May have members
Membership dues are tax-deductible
May engage in lobbying activity
May engage in lobbying activity
May engage in political campaign activity
Qualifies for state sales tax-exemption*
Applies with IRS

501(c)(3)

Description Charitable, educational, scientific & research, religious
May accept tax-deductible charitable donations Yes
May have members Yes
Membership dues are tax-deductible Dues may be tax-deductible as a charitable contribution to the extent the amount of dues paid exceeds the value of membership benefits received.
May engage in lobbying activity Yes, but to a very limited extent.
May engage in political campaign activity No
Qualifies for state sales tax-exemption* Usually, depending on the state
Applies with IRS Form 1023
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501(c)(4)

Description Social Welfare “Lobbying”
May accept tax-deductible charitable donations No
May have members Yes
Membership dues are tax-deductible Dues may be tax-deductible as a business expense depending on the facts and circumstances.
May engage in lobbying activity Yes
May engage in political campaign activity Yes, using a political action committee (PAC).
Qualifies for state sales tax-exemption* Not usually
Applies with IRS Form 1024
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501(c)(6)

Description Business or trade association. Organized to promote the members’ common business interests.
May accept tax-deductible charitable donations No
May have members Yes
Membership dues are tax-deductible Dues may be tax-deductible as a business expense depending on the facts and circumstances.
May engage in lobbying activity Yes
May engage in political campaign activity Yes, using a political action committee (PAC).
Qualifies for state sales tax-exemption* Not usually
Applies with IRS Form 1024
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501(c)(7)

Description Social or recreational (e.g fraternities, sororities, country clubs, community recreational facilities, hobby clubs)
May accept tax-deductible charitable donations No
May have members Yes
Membership dues are tax-deductible No
May engage in lobbying activity Yes
May engage in political campaign activity Yes, using a political action committee (PAC).
Qualifies for state sales tax-exemption* Not usually
Applies with IRS Form 1024
Get Started
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