Student Organization Guidance on Taxes
THIS GUIDANCE IS FOR EDUCATIONAL PURPOSES ONLY. EACH LEGAL SITUATION IS VERY FACT
SPECIFIC AND UNIQUE TO EACH INDIVIDUAL ORGANIZATION. THUS, WHILE THIS DOCUMENT WAS
PREPARED WITH ASSISTANCE BY AN ATTORNEY, THE ACCURACY OF THE INFORMATION AND THE PROCESS
IS NOT WARRANTED. THIS DOCUMENT SHOULD BE CONSIDERED A GUIDE AND SHOULD NOT BE CONSIDERED
A SUBSTITUTE FOR ACTUAL, ONE-ON-ONE LEGAL ADVICE. FOR ACTUAL LEGAL ADVICE, YOUR ORGANIZATION
SHOULD CONTACT ASMSU LEGAL SERVICES.
A. All clubs with a Tax ID number (aka Employee Identification Number) need to file
a form with the IRS, no matter what. The proper form for an organization depends on
how much the organization takes in. See the following chart for more details:
Tax Exempt Organization Filing Requirements
Gross Receipts (Revenue)
$50,000 up to $100,000
For organizations that have gross receipts of less than $50,000, the Student Organization need only file IRS Form 990-N on an annual basis. This form is available online and takes very little time to complete.
Steps to begin E-Postcard:
1. Go to IRS WEBSITE
2. Create a user profile
3. Manage E-Postcard Profile
4. User Type: Exempt Organization
5. Add EIN (aka Tax ID number) IMPORTANT: If it does not recognize your EIN or states it is inactive, contact the
IRS directly at 877-829-5500. If they are unable to help you, please contact ASMSU Legal Services.
6. Create New Filing
For filing, you will need:
- Your EIN (Tax ID number)
- Tax Year
- Legal club name and mailing address
- Any other names your organization uses
- Name or address of principal officer/leader
- Web address (if applicable)
- Confirmation that gross receipts are less than $50,000
- Statement of termination (if ending)
A: Possibly, it depends on how much money your organization takes in.
All Student Organizations should request an EIN (Employer Identification Number, or a Federal Tax Identification Number, also referred to as a Tax ID number. If your club does not need a bank account and does not plan to take in more than $5,000, there is no need to file for tax-exempt status or an EIN.
If the Student Organization reports LESS THAN $5,000 on their “gross receipt,” regardless of the organization's classification, it will automatically be considered tax-exempt and will not need to file for tax-exempt status with the IRS, but will still need to file the 990-N form (see link towards top of page). In this context, “tax-exempt” means that your organization does not need to pay taxes, but it does not allow donations to your organization to be tax deductible. You must obtain 501(c)(3) or similar status as described below.
A “gross receipt” is defined by the IRS as “the total amounts the organization received from all sources during its annual accounting period.” Note that this number is calculated before subtracting any costs or expenses. Also note that this number includes money given to your club through the student organization fee (were allocated any money from the Office of Student Engagement), money given to your organization from an MSU department, donations later re-donated to a charity, dues collected from members, etc. Thus, most forms of money taken in by the organization count against this $5,000 limit. If you do not know how much you were allocated, email email@example.com and OSE will look up for you.
A: Form 990-N is due every year by the 15th day of the 5th month after the close
of your tax year. You cannot file the e-Postcard until after your tax year ends. Each student organization may set their own tax
year. We recommend making your tax year the calendar year.
Example: If your tax year ended on December 31, the e-Postcard is due May 15 of the following year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.
A:If your club has less than $5,000 in gross receipts in a tax year, then your club is automatically tax-exempt.
For those who have MORE than $5,000 in gross receipts, one of the most common forms of tax exempt organization is a 501(c)(3). Becoming a 501(c)(3) is not an easy process. It takes a lot of work and money to file all the proper paperwork. That said, the benefits include exemption from state sales tax for certain purchases, the ability for donors to write off their charitable contributions, etc. Conversely, becoming a 501(c)(3) does restrict your organization’s lobbying rights. To learn about the fees and paperwork involved, please visit the Montana Nonprofit Association’s website.
Another option may be to become a Tax-Exempt organization by filling out the 1023-EZ. This is for organizations who take in between $5,000-$50,000. There is a one-time fee of $275, however, once you are tax-exempt you will not have to pay this fee again. It takes 90 days to process. If you wish to do this, we recommend working with ASMSU Legal Services to file.
- Your club is required to complete a 1099-MISC reporting form for an independent worker or unincorporated business if you paid that independent worker or business $600 or more. You add up all payments made to a payee during the tax year, and if the amount is $600 or more for the year, you must issue a 1099 for that payee.
- This is ONLY if you made the payment from your student organization bank account directly. If you turned in any invoices to be paid directly to the vendor to the Office of Student Engagement, you DO NOT need to submit this form.
A. Please seek out the appropriate parties for questions:
- If you have general questions, need clarification, or have questions about your student organization fee funding, please contact the Office of Student Engagement at 994-3113 or email Mandy St. Aubyn at firstname.lastname@example.org.
- If you are having issues with the tax forms or have specific questions about the IRS
requirements, please contact the IRS Tax Exempt/Government Entities Help Line at 877-829-5500. Please note that faculty
or staff advisors are often not able to retrieve information, as they are not officers
in the group.
- If you need legal advice or are having issues receiving a solution from the IRS, your student organization is welcome to schedule an appointment with ASMSU Legal Services. You can schedule an appt. by going into 221 SUB. Traditionally, students are charged $10 for this service. However, as a registered student organization, ASMSU is waiving this fee. If you miss your appt., however, you will be charged $10. The individual(s) who will be filing the IRS documents must be at the meeting. Be sure to indicate when you make the appt. you are with a student organization. Be prepared to bring any relevant documents to this appointment, such as IRS letters, financial records and your Tax ID number. Please only have those with the authority to make decisions for your student organization attend this meeting.
Contact Mandy St. Aubyn, Office of Student Engagement