Most nonprofits are 501(c)(3) organizations, which means they are formed for religious, charitable, scientific, literary, or educational purposes and are eligible for federal and state tax exemptions. To create a 501(c)(3) tax-exempt organization, first you need to form a Texas nonprofit corporation. Then you can apply for tax-exempt status from the IRS and the state of Texas.
From choosing a name to filing your nonprofit articles of incorporation, Rubio & Son is here to guide you through the entire formation process.
Tax Identification Number
A Texas Tax ID is a nine-digit number that’s assigned by the state’s comptroller. This is separate from the federal Employer Identification Number (EIN), which is a nine-digit number issued to a business or company by the IRS. There is a distinct differentiation between the two sets of numbers, even though they both have the same amount of digits.
EIN and Texas Tax ID Application Process
As part of the application process for getting your Texas Tax ID, you must be able to provide the federal EIN. Although it is an Employer Identification Number, it does not mean that you must have employees.
With your EIN and Texas Tax ID in-hand, you can do all, but not limited to, the following:
• Open your nonprofit’s bank account(s)
• Handle employee payroll (if you have workers employed)
• Obtain commercial lines of credit
• Apply for grants
• Apply for industry-specific licenses