Nonprofit Tax Filing Requirements for Fraternal Beneficiary Societies and Associations
An overview of applying for tax-exempt status, 990 filing requirements, and IRS deadline.
What Should Fraternal Beneficiary Societies and Associations Know About Tax Exemption and Form 990 Filing?
- Updated August 14, 2023 - 2.00 PM - Admin, Tax990
Though most nonprofits' primary focus is to ensure their members' or the community's welfare, the operational purpose may vary slightly from organization to organization. Based on that, the IRS classifies each nonprofit under a specific IRC section for tax exemption purposes.
Read this article to understand how Fraternal Beneficiary Societies can apply for federal tax exemption, their tax filing requirements, and more.
Table of Contents
How Does the IRS Define Fraternal Beneficiary Societies
and Associations?
As per the IRC Section 501(c)(8), Fraternal Beneficiary Societies and Associations are organizations that are organized and operated with the primary purpose of offering for payment of life, sickness, accident, or other similar benefits to the members.
These organizations are operated under a lodge system and may also carry out numerous activities that further social, educational, and charitable purposes.
Note:
These organizations are different from Domestic Fraternal Societies classified under IRC Section 501(c)(10), which usually don’t provide payment for benefits.
How Can Fraternal Beneficiary Societies Apply for Tax Exemption?
In order to be eligible for obtaining tax-exempt status, Fraternal Beneficiary Societies are required to meet the following requirements.
Should have a fraternal purpose and a notable program of fraternal activities.
Should operate under a lodge system with at least two active entities as Parent organization and Subordinate organization, respectively
Should provide the members with the payment of life, sick, accident, or other similar benefits
Note:
The organizations providing benefits only to a part of their members may still qualify for tax-exempt status if most of the members are eligible for benefits, and the criteria for excluding the members are reasonable.
The Fraternal Beneficiary Societies that fulfill these requirements can file Form 1024 – Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code and obtain tax-exempt status.
What are the 990 filing Requirements for Fraternal
Beneficiary Societies?
The Fraternal Beneficiary Societies that obtained tax-exempt status under the IRC Section 501(c)(8) are required to file 990 Series Forms annually to report the details required so that the IRS can ensure the tax-exempt status isn’t misused.
Form 990-N - Fraternal Beneficiary Societies with gross receipts of $50,000 or less.
Form 990-EZ - Fraternal Beneficiary Societies with gross receipts less than $200,000 and assets less than $500,000.
Form 990 - Fraternal Beneficiary Societies with gross receipts of $200,000 or more (or) assets of $500,000 or more.
Additional Filing Requirements
Fraternal Beneficiary Societies that E-file Form 990 or 990-EZ may be required to include certain Schedules for reporting additional information.
Also, if the unrelated business income of the Fraternal Beneficiary Society is $1000 or more, they must file Form 990-T electronically.
When is the Form 990 Deadline for Fraternal Beneficiary Societies?
990 forms are generally due by the 15th day of the 5th month after the end of the accounting period, followed by the Fraternal Beneficiary Societies.
So, Fraternal Beneficiary Societies that follow the calendar tax year will have their 990 deadline on May 15th.
Operating on a Fiscal Tax Year? Find your 990 due date.
If the deadline falls on a weekend, or a federal holiday, the Fraternal Beneficiary Societies must file their 990 forms on or before the next business day.
Fraternal Beneficiary Societies Can E-file Form 990 Efficiently with Tax990!
Fraternal Beneficiary Societies and other tax-exempt organizations can eliminate any hassles in their 990 filings using Tax 990, the IRS-authorized e-file provider.
A few of the helpful features offered by Tax990 to simplify the filing are,
Free Schedules - Includes the applicable Schedules for free, based on the data you enter.
Easy Form Preparation - Enable a simplified form preparation using Form-based Or Interview style filing options.
Internal Audit System - Ensures accurate 990 returns by auditing them for IRS errors
before transmission.
Retransmit Rejected Returns - Provides the option to retransmit the IRS-rejected returns for free after fixing the errors.
Live Customer Support - Resolves any questions regarding the filing instantly via live chat, phone,
and email.
