Note: This information only applies to Registered Student Organizations. Campus Life programs are considered under the umbrella of the university, and all tax filing is handled as part of the university’s annual reporting.
As a Registered Student Organization (RSO), you may be required to file taxes with the Internal Revenue Service on an annual basis. It is important to understand IRS tax filing requirements, as failure to comply could result in hefty dues and potential legal trouble for your organization.
Does our organization have to file taxes?¶
To begin, review the Status page, Tax Information handout, and Tax-exempt Webinar to gain a better understanding of tax terminology.
Unincorporated Associations
Student groups that remain unincorporated with annual gross recipients (e.g., revenue) generally under $5,000 do not necessarily need to file, but they do have a responsibility towards detailed financial tracking and documentation.
Student groups that remain unincorporated but are larger in nature (over $5,000 in annual revenue generally) will need to file the IRS Form 1120 (U.S. Corporation Income Tax Return) as a taxable organization or proceed with filing for nonprofit and tax-exempt status. Visit the Status page to learn more about reasons to consider pursuing these statuses.
Tax-Exempt Organizations
While you are not required to pay taxes, you are still required to report your income to the IRS each year by submitting a form from the 990 series. The required form is determined based on your group’s annual income:
- Revenue of less than $50,000: IRS Form 990-N
- Revenue of $50,000-$200,000: IRS Form 990-EZ
- Revenue of greater than $200,000: IRS Form 990
Student groups that remain unincorporated with annual gross recipients (e.g., revenue) generally under $5,000 do not necessarily need to file, but they do have a responsibility towards detailed financial tracking and documentation.
Student groups that remain unincorporated but are larger in nature (over $5,000 in annual revenue generally) will need to file the IRS Form 1120 (U.S. Corporation Income Tax Return) as a taxable organization or proceed with filing for nonprofit and tax-exempt status. Visit the Status page to learn more about reasons to consider pursuing these statuses.
While you are not required to pay taxes, you are still required to report your income to the IRS each year by submitting a form from the 990 series. The required form is determined based on your group’s annual income:
- Revenue of less than $50,000: IRS Form 990-N
- Revenue of $50,000-$200,000: IRS Form 990-EZ
- Revenue of greater than $200,000: IRS Form 990
Where can we find the various IRS Forms?¶
All forms can be found at https://www.irs.gov/forms-instructions.
What are our filing due dates?¶
This is dependent on your entity status, as well as your organization’s fiscal year. Groups are encouraged to operate on the university’s fiscal year of July 1 – June 30, however for some it may make more sense to operate on a traditional calendar year. The dates below correspond to organizations operating on a July 1 – June 30 fiscal year:
- Tax-Exempt Organizations: November 15th, or 15th day of the 5th month after fiscal year-end
- Unincorporated Associations: September 15th, or 15th day of the 3rd month after fiscal year-end
For more information on filing deadlines, search for your respective form on the IRS website and review the instructions.
Payment for Services Performed by Individuals¶
Student groups may pay individuals for services performed, as long as there is reasonable justification for the payment amount and the payment process is authorized by the group’s constitution and by-laws. We recommend that authorization be in writing in meeting minutes and that the group draw up a contract.
All amounts paid as salaries, wages, stipends, remuneration, or whatever name is given, are taxable by the IRS and by Minnesota. All groups with payroll must withhold from individual pay for FICA (Social Security), federal income tax, and Minnesota income tax. Additionally, you must pay for Employers FICA, Minnesota unemployment tax, and workers compensation. For those who are not 501(c) organizations, federal unemployment tax must be paid.
Groups paying independent contractors for services, who are not employees subject to withholding, have a special requirement. Each individual paid $600 or more in a calendar year must be sent a Form 1099-MISC (showing how much was paid) by the following January 31. This applies to stipends for officers of student groups. A copy of this, accompanied by a Form 1096, goes to the IRS by the end of February. Minnesota has a similar requirement. Send a copy of Form 1099 to the Minnesota Department of Revenue.
Paying International Performers or Artists¶
If you are paying international individuals (including performers, artists or speakers), your student group is responsible for withholding a portion of the amount you plan to pay the “performer”, as outlined in IRS Publication 515. The student group (the payer) is responsible for withholding the tax. It is not the responsibility of the payee. If the group doesn’t withhold the tax, they can become personally liable for the tax, interest and any penalties.
Tax Obligations: Payroll and Income¶
Nonprofit organizations must comply with all federal, state and local employment laws when hiring and employing personnel, including withholding and payment of payroll taxes and use of restricted funds.
Student groups that have paid employees are required to pay federal and state taxes. We encourage groups to consider using a payroll service to help manage payroll. Payroll services can also assist with W2s.
Employees of registered student groups classified as Registered Student Organizations are not employees of the University and are not eligible for benefits of any type, including compensation, from the University.
Where can we get help with our taxes?¶
Student Activities staff are happy to provide guidance and referrals, however we are not tax professionals and are not permitted to assist with tax forms or provide tax advice.
Schedule a meeting with a Student Activities Advisor at http://z.umn.edu/studentgroupadvising
Student Group 501(c)(3) Status Training for RSOs
This training is catered to Registered Student Organizations (RSOs) who are interested in filing for sales tax-exempt status with the Internal Revenue Service (IRS). RSOs that typically make over $5,000 in annual gross receipts are encouraged to apply for 501(c)(3) sales tax-exempt status. This training will provide recommendations on the steps and qualifications to apply for this status. the training recording with closed captioning can be viewed at https://z.umn.edu/taxexemptwebinar.
Be advised that Student Activities staff are not tax advisors or experts. Specific tax questions can be addressed by a tax advisor or CPA.
As a result of this training, you will be equipped to:
- Understand the qualifications to apply as a 501(c)(3) non-profit organization
- Follow the steps to register as a non-profit organization
- Become a tax-exempt organization
Supplemental Resources:
- Slide Deck: https://z.umn.edu/taxexemptslides
- Resource Document: https://z.umn.edu/taxexemptresources
- Transcript of Tutorial: https://z.umn.edu/taxexempttranscript
Other support
Organizations are encouraged to consult with their Student Activities Advisor or a professional CPA for official tax advice. Your organization may be able to find a local CPA for low or no cost to your organization.