| Policies and Guidelines |
Maine 4-H Program |
B.1.9 Tax Exempt Status of 4-H Organizations
Federal Income Tax Exemption for 4-H Organizations
4-H organizations that are authorized by the University of Maine Cooperative Extension to use the 4-H name and clover emblem are exempt from federal income tax.
Beginning in 2008, small tax-exempt 4-H organizations that previously were not required to file returns because they earned $25,000 or less are required to file an annual electronic notice called a 990N e-Postcard.
If a club plans on raising funds and/or having a club treasury account then they need to get an EIN (Employer Identification Number) through the IRS for their club. An EIN may be obtained by filing an application for Employer Identification Number (Form SS-4) with the IRS. Although the form was designed primarily for organizations paying wages, it is also used by all organizations that are required to have an identifying number. When your club opens an account with a bank they will ask for this number. You are never supposed to give someone’s social security number when opening an account for a 4-H club/organization.
Instructions for filling out the SS-4 form:
·
Questions 1,3-5: Fill in your name and address and the 4-H club name.
·
Question 2 is usually left blank
·
Question 7 is usually left blank
·
Question 8a: answer no
·
Question 9a: Type of Entity: Select “other (specify)” and write
in “4-H Clubs and Affiliated 4-H Organizations” and for “Group Exemption Number
(GEN) if any” write in: “2704”
·
Question 9b: You can skip this question.
·
Question 10: Reason for applying: Select “Other (specify)” and
write in “Starting 4-H Club or Starting 4-H Organization”
·
Questions 11-12: These are left blank
·
Question 13: These entries are typically “0”
·
Question 14: This is typically “yes”
·
Question 15: This is usually left blank
·
Question 16: Check “Other (Specify)” and write in “Education”
·
Question 17: Write in “Youth Development and Education
·
Question 18: Only mark "yes" if you have filed for another EIN in
the past. Otherwise mark “no” and then the form is complete once it is signed
and dated.
·
Once the form has been completed you can apply by telephone, fax,
mail, or on-line. Refer to these
instructions.
How to File SS-4
Mail
By Mail send your completed SS-4 form to:
Attn: EIN Operation
Holtsville, NY 11742
(This may take 4-6 weeks to get a number)
Phone
By Phone you can call from 7:00 AM -10:00 PM local time only) : (800)
829-4933
(You can usually get a number the same day you call)
Fax
Or you can Fax your completed and signed form to: (631) 447-8960
(This may take 2-4 weeks to get a number mailed to you)
On-line
On-Line
(You can usually get a number the same day)
Important note: If you apply for your EIN over the phone or on-line you may need to give your Social Security number for identification purposes only and you may be asked to fax your completed form to the IRS.
Sample of a completed SS-4 form for a 4-H club
The SS-4 form may be obtained from any Social Security Administration or IRS office. Your county Extension staff can help you with this form.
Because 4-H is exempt from Federal Income Tax, many donations to 4-H and out-of-pocket expenses of 4-H volunteers are deductible on volunteers’ personal income tax forms. For other Federal Tax Forms or information, call the IRS at 1-800-829-1040 or visit the IRS Web site at http://www.irs.gov.
4-H Club Certification
Once you have your EIN you need to fill out the “Maine Certification of 4-H Clubs and Affiliated 4-H Organizations Under the National 4-H Federal Tax Exempt Status form” and send it in to your county 4-H office. The County Office staff will make a copy of your form and send it to the Executive Director of the 4-H Foundation who will then forward this information on to National 4-H.
Filing your 4-H Club or 4-H Organization 990N E-Postcard
Beginning in 2008, small tax-exempt 4-H organizations that previously were not required to file returns because they earned $25,000 or less are required to file an annual electronic notice called an e-Postcard.
GEN 2704 4-H Clubs & Affiliated 4-H Organizations earning more than $25,000 per year must continue to file by annually by the 15th day of the 5th month following the close of their tax period to remain exempt from federal income taxes under GEN 2704. Maine’s tax period for 4-H clubs is October through September; therefore our date will be February 15th of the following year.
Steps on how to file your 990N E-Postcard (You can only file on-line)
(1) Register as a New User
(2) Create your Form 990-N (e-Postcard)|
To complete a 990-N e-Postcard, qualified 4-H Clubs & Affiliated 4-H
Organizations need to provide the
following information:
· Organization’s legal name – as legally chartered or otherwise formally tied to the organization’s EIN
· Any other names your organization uses (not relevant for most 4-H Clubs & Affiliated 4-H Organizations)
· Organization’s mailing address – as tied to the organization’s EIN
· Organization’s website address – if you have one
· Organization’s EIN (Employer Identification Number) – this is a unique number that identifies the organization to the IRS, much like our personal Social Security Numbers identify individuals to the IRS. This is what you received when you sent in your SS-4 form.
· Name and address of the principal officer of your organization – tied to the EIN. This is most likely the leader of your 4-H club and the name and address on the SS-4 Form.
· Organization’s annual tax year – which may or may not be defined by your State 4-H Program Office (The tax year for Maine is October through September.)
· Confirmation that your organization’s annual gross receipts are still normally $25,000 or less
(3) Submit your Form 990-N (e-Postcard).
The e-Postcard (not available in paper form) is supported by most browsers as noted on the IRS site. Please contact state or local 4-H extension professionals if you need assistance filing your e-Postcard.
(Not relevant for GEN 2704: the e-Postcard includes an option for stating that your organization has or is terminating.)
Paying State Sales Tax
University of Maine Cooperative Extension is exempt from State of Maine sales tax under the Sales and Use Tax Law. University of Maine Cooperative Extension at the state level is exempt from paying state sales taxes on purchases because it is part of the University.
Individual 4-H leaders, volunteers and clubs are not sales tax exempt. To take advantage of the sales tax exemption, purchases must be made by the County Extension office or with County Extension office authorization. Direct billing to Cooperative Extension or presentation of a petty cash voucher is the correct way to obtain the exemption. Local merchants often know and accept 4-H leaders and other Extension volunteers, but if there is any question, a purchase should be made by direct billing to the County Extension office. The invoice should be marked “Sales Tax Exempt.”
Collecting State Sales Tax
Non-profit groups, including 4-H and other volunteer Extension groups, are required to register with the Maine Bureau of Taxation and collect and remit sales taxes if the sales, such as fund raisers, are “on a continuing basis” or if the club or association “continuously holds itself out to the public as a seller.”
Volunteer organizations such as 4-H groups are exempt from paying sales tax on fund-raising efforts “of limited duration,” although the activities are no longer limited to a specific number of days. If a fund-raising effort is on going, sales tax must be both collected by the organization and transmitted to the Maine Sales Tax Division.
If a 4-H club owes taxes to the state, it needs to file a report and remit payment only once annually unless its tax liability is more than $25 per month, in which case it must file monthly. For more information, ask for Sales and Tax Instruction Bulletin #9, "Casual and Infrequent Sales" (see section 5), and General Information Bulletin #79 (section 5) from:
Bureau of Taxation
Sales Tax Section
State House Station 24
Augusta, ME 04333
Tel. 207-287-2336
Because of the record-keeping involved, it is strongly recommended that 4-H organizations limit their fund-raising activities to a few days or some other limited period of time in order to remain exempt.
11/16/09