If you have a non-profit or charitable organization in the US, you can get tax-exempt status from federal taxes. Now, to manage your tax responsibilities, you will need the Employer Identification number for your organization.
IRS is responsible for the Tax ID number (EIN) for entities or business owners. If you wish to obtain it, you can learn the application process and other details for the EIN application here.
Apply for a Tax ID (EIN) Number for a Non-Profit Organization
The tax ID Number is important for the non-profit organization to get the tax-exempt status and file the federal tax returns during the tax season. The EIN is not only limited to tax responsibility, but also for purposes such as:
- Bank purposes
- Hiring staff for the organization
- Managing finances
- Other Operations of the organization
Hence, if you have a non-profit organization, you must apply for the EIN immediately. The IRS allows you to apply for non-profit organizations in the following ways:
- EIN Assistant online
- Fax: Find IRS Form SS-4 and fax it to 855-641-6935.
- Post: The completed EIN application form should be mailed to EIN Operations, Cincinnati, OH 45999.
- Foreign applicants can only apply by phone at 267-941-1099 (Mon to Fri between 6 AM to 11 PM in Eastern time) or by fax at 304-707-9471 (living in another country) or 855-215-1627, or by mail at EIN International Operations.
What are the requirements for a Non-Profit Organization for an EIN Application?
Before you apply for the EIN for your non-profit organization, you should know if you are eligible to apply or not to ensure your application gets approved:
- Your non-profit organization must be established in the US or US territories.
- You must have registered the organization with the US state authority where it is located to ensure it is legally formed and complies with all the laws. If the entity is not government, the responsible party should be an individual with a valid Social Security or Individual Taxpayer Identification Number; it should never be an entity.
Remember, if your organization is not formed legally, you should wait until it is legally formed, or you could lose the chance to get the tax-exempt status.
Documents to prepare for Non-Profit Organization EIN application
Before you begin your EIN applications for non-profit organizations, know what you will need for the application below:
- Responsible party SSN/ ITIN
- If you are a third party applying for your client, you must present a signed authorization letter from your client to complete the application. If not, you will have to submit Form 8821 or Form 2848.
- Address of the organization and other details
What is the fastest way to get an EIN for a Non-Profit Organization?
If you wish to get your EIN online within a day of application, you should opt for the online application method, as other methods can take time. So, once you have all the valid documents for EIN applications, you can follow the steps below to complete the online application:
- Go to the EIN Assistant and enter your legal entity type.
- Next, enter your non-profit organization details, name, address, and others.
- After that, enter your responsible party or third-party details.
- Now, you should select whether you wish to get an EIN online or by mail.
- Next, preview the entries and submit the online EIN application.
What happens after you complete the EIN application for a Non-Profit Organization?
When you apply for the EIN, the IRS will validate your details with the state authority where you have registered your legal entity. Once the IRS finds no issue in the application, they will issue the EIN within a day for online applications, 04 days for faxed applications, and 28 days for mailed applications.
Once your EIN is issued, you can do the following tasks immediately: bank account, file a tax return via mail, or apply for a license. However, if you wish to e-file your return, you must wait for at least two weeks.
This limitation on using the EIN advises you to apply early for the EIN if you have tax purposes due. Even though you can file a tax return after applying for an EIN, you will have to mail your payment to your state’s Service Center address if you do not get a Tax ID number by the time your deposit remains.
What can make you lose your tax-exempt status?
The non-profit organizations apply for the EIN to get the tax-exempt status and fulfill the tax responsibilities; however, there is one thing that can make you lose your tax-exempt status even after obtaining an EIN.
When you apply for an EIN, the IRS clock starts running, and you have to file a tax return or annual notice (Form 990, 990-N, or 990-EZ) for three consecutive years.
If you do not file it for three consecutive years, your automatic tax-exempt status will be revoked, without any warning to the IRS, and you may not be able to appeal against it.
So, after you complete your EIN application, you must read and comply with all the rules related to a non-profit organization for the EIN to continue your tax-exempt status.
