What is the difference between not-for-profit and tax-exempt?
Non-profit and not-for-profit are state law concepts. Most states have laws whereby an entity can be incorporated as a non-profit or not-for-profit organization. However, the mere fact that an entity is organized as a non-profit or not-for-profit organization does not indicate that it is exempt from federal income tax. To qualify as a tax-exempt organization, an entity must meet requirements set forth in the Internal Revenue Code. See Types of Tax-Exempt Organizations or Publication 557 for more information.
