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Small California Tax-Exempt Organizations Must File to Retain Exempt Status

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Public Affairs Office
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For Immediate Release

01.05.2011

Sacramento — The Franchise Tax Board (FTB) announced that starting January 1, 2011, a new California law means tax-exempt organizations, other than churches and church-related organizations, with average gross receipts of $25,000 or less must electronically file with FTB or risk losing their tax-exempts status.

FTB is mailing notices to the more than 256,000 tax-exempt organizations meeting the criteria to file using FTB 199N, also known as the e-postcard. Available online, the e-postcard asks the same basic information as the IRS Form 990-N. The due date is the same for state and federal purposes — by the 15th day of the 5th month after an organization's tax year ends. For example, organizations whose calendar year ends December 31, 2010, must file by May 15, 2011.

A tax-exempt organization that fails to file the e-postcard for three consecutive years loses its tax-exempt status and may be liable for the $800 minimum franchise tax. Any organization losing its status will have to reapply for tax exemption.

In 2010, California conformed to the new federal law requiring small tax-exempt organizations, other than churches and church-related organizations, with gross receipts of $25,000 or less to file an information form with the IRS.

For more information, visit ftb.ca.gov and search for Exempt Organizations, or call FTB at 916.845.4171.

For more information on other taxes and fees in California, visit taxes.ca.gov.

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