Small California Tax-Exempt Organizations Must File to Retain Status

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via State of California Franchise Tax Board

The Franchise Tax Board (FTB) announced that starting January 1, 2011, a new California law means tax-exempt organizations, other than churches and church-related organizations, with average gross receipts of $25,000 or less must electronically file with FTB or risk losing their tax-exempts status.

FTB is mailing notices to the more than 256,000 tax-exempt organizations meeting the criteria to file using FTB 199-N, also known as the e-postcard. Available online, the e-postcard asks the same basic information as the IRS Form 990-N. The due date is the same for state and federal purposes — by the 15th day of the 5th month after an organization’s tax year ends. For example, organizations whose calendar year ends December 31, 2010, must file by May 15, 2011.

A tax-exempt organization that fails to file the e-postcard for three consecutive years loses its tax-exempt status and may be liable for the $800 minimum franchise tax. Any organization losing its status will have to reapply for tax exemption.

In 2010, California conformed to the new federal law requiring small tax-exempt organizations, other than churches and church-related organizations, with gross receipts of $25,000 or less to file an information form with the IRS.

For more information, visit www.ftb.ca.gov and search for Exempt Organizations, or call FTB at 916. 845.4171.

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