Beginning in 2022, the Internal Revenue Service has enhanced its e-file capabilities so that organizations can now file Form 1024, “Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code,” electronically. This form is filed so that organizations can apply for recognition of exemption from federal income tax.
Officially on January 3rd of this year, applications for recognition of exemption on Form 1024 should be submitted electronically online at Pay.gov. However, the IRS is providing a 90-day grace period where they will continue to accept paper versions of Form 1024 as well as letter applications. This means you can still file paper forms up until April 3, 2022.
Organizations requesting determinations under Section 521 now can use the electronic Form 1024 instead of the previous Form 1028 known as, “Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code”.
For those filing Form 1024, it is important to note that the user fee will remain at $600 for 2022, however, this fee can now be paid through Pay.gov as you are submitting the form. Organizations will have the option of making payments directly from a debit or credit card or their bank account.
The IRS also announced that applications for recognition of exemption under Sections 501(c) (11), (14). (16), (18), (21), (22), (23), (26), (27), (28), (29) and 501(d) are no longer able to be submitted as paper applications. These types of requests must be submitted using the electronic Form 1024. This means that for organizations described in Section 501(c), those classified as 501(c)(3) and 501(c)(4) applying for tax-exempt status must use the electronic form as well. This is also true for those organizations described in Section 501(d).
Electronic filing is great news for business owners as filing online helps reduce errors and also shortens the IRS processing time which means applicants will get a faster response regarding their taxes. If you have questions on how to complete Form 1024, be sure to contact your tax professional.
