I have sent in my application for my 501C3 agency. If I begin to raise funds for the agency, is the tax deductibility retroactive? In other words if someone donates $10,000 on September 1st and we don't get the 501C3 approved until October - is that donation given on September 1st tax deductible?

Possibly.

The title of this thread suggests you were looking for "501c3 rules". Section 501 (c) (3) is a provision of the Federal tax code. You might start by going to the IRS website and finding an online manual about Section 501 (c) (3).

Thanks for your response AK. I used the online manual quite extensively when I prepared the 501C3 and it was very helpful - answering most of the questions I have. However, I was not able to locate an answer to when the tax exempt status begins - only after the application is approved or would it be retroactive to the date the application was sent in?

I will keep looking - thanks again.

God's blessings

Robin

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Originally Posted by rmadson

In other words if someone donates $10,000 on September 1st and we don't get the 501C3 approved until October - is that donation given on September 1st tax deductible?

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Hello r:

Possibly, and possibly NOT.. Your donor won't find out about it for a year or so, and it'll be an unpleasant surprise..

But, WHY even take the chance? You'd certainly like to GUARANTEE your donor that his gift will be deductible, wouldn't you? So, tell your donor to put the money in the bank for a few weeks in order to positively guarantee the results... He'll LIKE you for that.

excon

You are first assuming you will be approved on your first application, It is not uncommon to either be refused or asked for additional information.

You are not a tax approved group until it is approved. If you give the impression or tell someone their donation at this point is tax deductable that is illegal.

So someone will have to give you the money knowing you are not a tax exempt charity, ( no assumptions) and if the donation was given after the date of the approval letter, then it would be.