Are 501(c)(3) Organizations Tax Exempt?

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 14, 2022

Are 501(c)(3) Organizations Tax Exempt?

501(c)(3) organizations are exempt from federal income taxes and some state taxes under section 501(c)(3) of the Internal Revenue Code (IRC). 501(c)(3)s are typically nonprofits whose income is mostly from public donations. Tax exemption ensures these funds go where they are needed.

Determining if 501(c)(3) Organizations Are Tax Exempt FAQs

What is a 501(c)(3) organization?

A 501(c)(3) organization is a non-profit organization with tax exempt status that is dedicated to the general well-being of society.

Are 501(c)(3) Organizations Tax Exempt?

Yes, 501(c)(3) qualify as tax exempt institutions.

Is a 501(c)(3) organization tax exempt?

A 501(c)(3) organization is tax exempt so long as it remains true to its stated mission and remains compliant with the IRS.

What does 501(c)(3) mean?

501(c)(3) is the internal revenue code (IRC) section for organizations with tax exempt status. 501(c)(3) falls under internal revenue code 501(c).

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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