Difference between Tax Exempt & Nonprofit

Difference between Tax Exempt & Nonprofit

Question:  What is the difference between nonprofit and tax-exempt status?

Answer:  Nonprofit status is a state law concept.  Nonprofit status may make an organization eligible for certain benefits, such as state sales, property and income tax exemptions.  Although most federal tax-exempt organizations are nonprofit organizations, organizing as a nonprofit organization at the state level does not automatically grant the organization exemption from federal income tax.  To qualify as exempt from federal income tax, an organization must meet requirements set forth in the Internal Revenue Code. See Types of Tax-Exempt Organizations or Publication 557 for more information.

2014-08-08T19:32:23+00:00 March 3rd, 2014|FAQs|0 Comments

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