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What is the difference between being a nonprofit and being tax-exempt?

April 26, 2017nonprofit tax-exempt

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What is the difference between being a nonprofit and being tax-exempt?

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You must be a nonprofit organization if you want to qualify for tax-exemption, however, your organization is not tax-exempt because you’ve file for incorporation. In Nebraska and Iowa an organization becomes a nonprofit by filing articles of incorporation with the Secretary of State. Upon filing this document, you are able to apply for recognition of exemption with the Internal Revenue Service (Form 1023).