When many people think of non-profit organizations, they imagine them as something separate from the world of business. Non-profit organizations have the reputation of doing useful work while remaining unscathed by corporate greed. From the perspective of the IRS, though, corporations and non-profit organizations are more alike than different. Both types of organizations have income and expenses, and they both pay employees; thus, their tax obligations are quite similar. Non-profit organizations, just like businesses and even churches, must file tax returns. Therefore, non-profits need a non-profit organization Tax ID number. It is the same as getting an EIN number for a business, except that you select non-profit organization as your entity type.
The types of non-profit organizations that most readily come to people’s minds are international humanitarian organizations. Besides those, most people think of non-profits as scrappy startups dedicated to fulfilling a social mission rather than turning a profit. In reality, non-profit organizations are quite a diverse group of entities. The following types of organizations can all register with the IRS as non-profits:
Anything that puts all its income into fulfilling its mission instead of earning a profit can be a non-profit organization. Paying employees counts as part of the organization’s expenses. Many non-profits do employ volunteers, but having paid employees does not disqualify you from being a non-profit organization.
The fastest way to apply for an EIN number for your non-profit organization is to fill out form SS4 online. Within an hour of submitting the form, your non-profit will receive a confirmation email with its EIN.
Non-profits do not have to pay taxes, but they do need EIN numbers.