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What kind is best for your veteran organization with so many types of nonprofits? Securing 501(c)(19) federal tax exemption is mandatory for nonprofits dedicated to serving United States Armed Forces personnel and veterans. This classification unlocks tax advantages and solidifies an organization's credibility and commitment to its noble cause.
Our comprehensive guide delves into the nuances of 501(c)(19) veterans organizations, eligibility requirements, and the application process, empowering organizations to navigate this critical designation effectively.
501(c)(19) is an IRS tax-exempt status for veterans organizations supporting United States Armed Forces veterans and current members. These nonprofits focus on improving the lives of service members, veterans, and their families.
They focus on past or present members through activities such as providing social and recreational opportunities, offering insurance benefits, and advocating for their welfare.
Types of Organizations Exempt Under Section 501(c)(19)
To qualify for 501(c)(19) veterans organization exemption, you must be one of the following:
A post or organization of past or present U.S. Armed Forces members.
An auxiliary unit or society of such a post or organization.
A trust or foundation that benefits these posts or veterans organizations.
These nonprofit organizations must engage in activities that:
Support the welfare of veterans.
Assist disabled war veterans and their dependents.
Provide care and entertainment to hospitalized veterans or current service members.
Preserve the memory of deceased veterans.
Participate in patriotic events.
Examples of Organizations Operating as a 501(c)(19) Veterans Organization
Veterans of Foreign Wars (VFW) of the United States: Their mission is to foster friendship and brotherhood among United States veterans of overseas conflicts. The organization aims to serve the war veterans and the military and advocate on their behalf.
What’s the Difference between 501(c)(3) and 501(c)(19)?
501(c)(3) nonprofit organizations include public charities and private foundations. Contributions to 501(c)(3) nonprofit organizations are tax deductible. These nonprofit organizations are exempt from sales and property taxes in many states.
Like 501(c)(3) organizations, donors and supporters of a 501(c)(19) veterans organization can deduct their charitable contributions on their federal income tax returns. Tax deductions are applicable only when at least 75% of the organization’s membership consists of veterans.
The distinction between these nonprofit organizations lies in the specific communities they both serve.
While some 501(c)(3) nonprofit organizations serve veterans, their goals are not limited to the welfare of the veterans’ community only. A 501(c)(19) veterans organization solely works for the betterment of armed forces members and veterans.
501(c)(19) Eligibility and Requirements
To be eligible for 501(c)(19) tax-exempt status, an organization must meet the following criteria:
Be established in the United States or its possessions.
Have at least 75% of its members as past or present United States Armed Forces members, cadets, students of college ROTC programs or Armed Services academies, or their spouses, widows, widowers, relatives, or lineal descendants.
Limit its activities to those specified by the IRS, focusing on the betterment of veterans and service members.
Ensure that earnings do not benefit any private shareholder or individual.
Auxiliary units, societies, trusts, or foundations associated with veterans' posts or organizations must adhere to additional requirements. Some of these requirements include:
Being organized according to the bylaws of the parent organization.
Having a specific membership composition of 75% veterans or spouses of veterans.
Distributing income for charitable purposes.
A trust or foundation for a veterans’ post or organization can access tax-exempt status if:
It is valid under local law and organized for charitable purposes
It has a dissolution provision dictated in section 1.501(c)(3)-1(b)(4) of the Income Tax Regulations.
Its corpus and income are used only to fund a veterans' post or organization’s charitable activities or as an insurance set aside.
Its income is not accumulated unreasonably.
A substantial portion of the auxiliary organization’s income is distributed to a veteran post or organization or for purposes intended for:
Religion
Charity
Science
Literature
Education
Prevention of cruelty to children or animal purposes
5 Steps to Start a 501(c)(19) Veterans Organization
Establishing a 501(c)(19) organization begins by forming a board of directors of individuals committed to serving veterans and current United States Armed Forces members.
Develop a clear mission statement that outlines how your nonprofit will support these communities. Create bylaws that define your organization's structure, leadership roles, and decision-making processes. Ensure these bylaws align with IRS requirements for 501(c)(19) status.
Articles of Incorporation are also known as certificates of incorporation or corporate charters. These legal documents must be filed with the Secretary of State in the state where your organization is based.
These articles contain essential business information and officially register your nonprofit with the state. Each state has specific filing requirements, so research the regulations in your state to ensure you have all the necessary documentation before submitting your application.
3. Acquire an Employer Identification Number (EIN)
Every business and organization must register for an EIN to identify your organization on several documents.
Apply for an EIN through the IRS’s online application. Ensure that the person applying should be your nonprofit's primary member or decision-maker.
4. Complete Form 1024 to Apply for Tax-Exempt Status
To apply for 501(c)(19) tax-exempt status, you must complete IRS Form 1024
Ensure that you select the correct version of Form 1024 for your 501(c)(19) organization and mark the box labeled "M" in Part I.
The form is 22 pages long and requires detailed information about your organization.
Carefully review the instructions before completing the form to ensure accuracy and faster processing.
Pay the required fee and submit your completed Form 1024 online through Pay.gov.
5. Maintain Your 501(c)(19) Status
To maintain the tax-exempt status of your 501(c)(19) organization, ensure that you diligently complete the annual tax filing requirements. It shows that your organization is following all the best practices.
You’ll need to file Form 990 to file your tax returns annually. The form updates the IRS with your organization’s activities and finances throughout the year.
Form 990 should be available for everyone to see how your nonprofit operates. Check the financial status requirements to choose the right version of Form 990 for your organization.
Case Study: How Commandery of St. Francis Raised $200,000 Using Zeffy’s Ticketing System
The Commandery of St. Francis, OSJ, a 501(c)(19) organization, hosted its 12th Annual Wounded Veterans' Polo Benefit in 2023. By using Zeffy, a 100% free ticketing system, the event raised an impressive $200,000 to support wounded veterans.
Zeffy's zero-fee model allowed the organization to save $10,000 in platform and transaction fees, ensuring more funds directly benefited the veterans in need. This successful event exemplifies the power of dedicated nonprofits and the importance of choosing the right fundraising tools.
Summing Up on 501(c)(19) Tax Status
Obtaining 501(c)(19) tax-exempt status is a significant milestone for nonprofit organizations supporting United States Armed Forces veterans.
By following the IRS requirements and application process, your nonprofit can gain access to valuable tax benefits. Establish your nonprofit as a trustworthy entity committed to serving the veteran community’s past or present members.
After securing your 501(c)(19) status, choose Zeffy, a 100% free fundraising platform designed for nonprofits. With Zeffy, you can focus on your mission of improving the lives of veterans and service members without worrying about any hidden charges.
A 501(c)(19) organization is formed to offer benefits specifically to veterans and current United States Armed Forces members. These nonprofit organizations work toward improving the community's general well-being and support the widows and orphans of deceased members of the forces.
Individual contributions to organizations with a 501(c)(19) status are eligible for tax deductions.
To maintain 501(c)(19) status, at least 75% of the organization's members must be past or present members of the United States Armed Forces. Additionally, at least 97.5% of the total membership must consist of past or present Armed Forces members, cadets, and certain family members.
The organization must also engage in activities that benefit its members, such as providing insurance benefits or sponsoring patriotic events.
In addition to maintaining 75% membership within United States Armed Forces, the organization must also engage in activities that benefit its members, such as providing insurance benefits or sponsoring patriotic events.
These organizations can engage in a variety of activities, including:
Providing social and recreational activities for veterans and armed forces.
Advocating for veterans' rights and benefits.
Sponsoring or assisting with patriotic events.
Collecting charitable contributions to support the veterans organization.
How to Start a 501(c) Organization: Your Detailed Guide
As per the IRS, 501(c) is a designation for tax-exempt nonprofits. Explore different types of 501(c) organizations and check the steps for starting one.
What is 501(c)(9) or Voluntary Employees’ Beneficiary Association
Forming a 501(c)(9) organization is a great way to offer employees health benefits while reducing tax liabilities. Here’s how to get your 501(c)(9) status.
501(c)(8) Organization: What is It and How Do You Start One?
501(c)(8) status applies to organizations that are fraternal beneficiary societies. Learn about 501(c)(8) organizations and how to apply for a tax-exempt status.
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