What Is a 501c3 in Pennsylvania?

Pennsylvania nonprofit organizations typically apply for 501(c)(3) status.

Pennsylvania law allows individuals to establish charitable organizations and nonprofit organizations, and for those organizations to be exempt from state taxation. These organizations are often called 501(c)(3) organizations, referring to the Internal Revenue Service code provision regulating federal taxation of charitable organizations.

Requirements

To establish a 501(c)(3) organization in Pennsylvania, a person must charter their business association in Pennsylvania as a non-profit and promulgate bylaws. After incorporation in Pennsylvania, an organization must register for 501(c)(3) status with the IRS. Once registered with the IRS, an individual can register their corporation with the Pennsylvania Department of Revenue.

Benefits

The major benefit to 501(c)(3) status is that the organization does not have to pay any federal or state tax. In addition, 501(c)(3) status often makes an organization eligible to receive grants from the government and charitable organizations such as the United Way.

Types

Organizations that typically obtain 501(c)(3) status include churches, public charities, educational non-profits, athletic organizations and organizations dedicated to promoting scientific research. Organizations that obtain 501(c)(3) status, however, are prohibited from engaging in political activity.

References

• Why War?: How to Start a 501(c)3
• The Pennsylvania Code: Chapter 41. Nonprofit Corporations
• Commonwealth of Pennsylvania Department of Revenue: Instructions for Sales Tax Exemption Application