• The IRS states that nonprofits are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code include any community chest, fund, or foundation organized and operated exclusively for religious, charitable, scientific, testing for public safety, or literary or educational purposes; fostering national or international amateur sports competition; or the prevention of cruelty to children or animals. These organizations are usually corporations and are exempt from federal income tax under section 501(a).
• An organization that is exempt from income tax under section 501(c)(3) of the Internal Revenue Code is also exempt from FUTA. An organization that is not a section 501(c)(3) organization is not exempt from paying FUTA tax.
• It’s best to check with your accountant to confirm these tax exemptions for accuracy in individual cases.

• The IRS states that nonprofits must withhold federal income tax from the pay of their employees.
• Per the IRS wages paid to employees of section 501(c)(3) organizations are subject to Social Security and Medicare taxes unless one of the following situations applies.

-The organization pays an employee less than $100 in a calendar year.

-The organization is a church or church-controlled organization opposed for religious reasons to the payment of Social Security and Medicare taxes and has filed Form 8274 to elect exemption from Social Security and Medicare taxes. The organization must have filed for exemption before the first date on which a quarterly employment tax return (Form 941) or annual employment tax return (Form 944) would otherwise be due.

• Employees may also be subjected to State and Local taxes in accordance with their State and Local tax requirements.

• Yes, with PSS you have access to reports that break out earnings paid for each grant. This can be done per payroll, monthly, quarterly and annually.

• Once you’ve taken the above steps and provide PSS with the necessary information your account can be ready in as quick as 3 days