An entity will qualify for the tax-exempt entity exemption if they meet any of the following four criteria:
- 501(c) Organization: The entity is covered by section 501(c) of the Internal Revenue Code of 1986 (Code) and is tax-exempt under section 501(a) of the Code, disregarding section 508(a).
- Recent Tax-Exempt Loss: The entity was exempt under section 501(c) of the Code but lost tax-exempt status within the last 180 days.
- Political Organization: The entity qualifies as a political organization under section 527(e)(1) of the Code and is tax-exempt under section 527(a) of the Code.
- Trust under Code 4947(a): The entity is a trust described in paragraph (1) or (2) of section 4947(a) of the Code.
To claim the tax-exempt entity exemption, ensure your entity meets one of these criteria.