If you're a sorority or fraternity treasurer, you've probably heard about tax-exempt status and Form 990. But what exactly are they? And why does filing matter?
To keep your chapter's tax-exempt status, Form 990 must be filed every year. This guide breaks down what Form 990 is, which version you should file, when to file it, and what to do if you fall behind.
Tax-exempt status means your chapter doesn’t have to pay federal income taxes on the dues and fees you collect. Most sororities and fraternities qualify under IRS Section 501(c)(7), which covers social clubs.
Your chapter’s tax-exempt status is what allows it to operate as a nonprofit - and it’s what separates member dues from being treated like taxable business income. Without it, the IRS could treat your entire budget as revenue subject to income tax.
To apply for 501(c)(7) status, your chapter must file IRS Form 1024. This application asks about your chapter’s formation, operations, bylaws, finances, and more.
Many national fraternities handle this for their chapters. But if you’re a colony, newly re-chartered chapter, or operate independently, you may need to do this yourself.
Yes - and you should. Even while your 501(c)(7) application is pending, the IRS expects you to stay current with your annual filings. Failing to do so could delay or jeopardize your approval.
Form 990 is an annual information return that nonprofits, like fraternities and sororities, and tax-exempt organizations must file with the IRS. It gives the IRS insight as to how your chapter operates financially.
For sororities and fraternities, Form 990 covers:
The Form 990 you need to file depends on your organization's gross receipts. Here's a quick table for reference:
If your chapter collects less than $50,000, you will file Form 990-N.
If your chapter collects between $50,000 and $200,000 and has less than $200,000 in assets, file Form 990-EZ or Form 990.
And lastly, if your chapter collects more than $200,000 or has more than $200,000 in assets, file Form 990.
Add up all revenue collected during your fiscal year - dues, merchandise sales, philanthropy income, fundraising proceeds, etc. Even if you spent it all, the total collected is what matters.
If your chapter is filing Form 990-N, you can do this online for free through the IRS website. Otherwise, you can use 3rd party e-verified solution.
If your chapter is filing Form 990-N online, it is free. For other Form 990s, expect to pay a fee of anywhere from $40-$500.
Your chapter’s Form 990 is due 5 months after the end of your fiscal year.
So if your fiscal year ends on May 31, your Form 990 is due by October 15.
You can file for an extension (Form 8868) to buy an extra 6 months - but you must do this before your deadline.
Failing to file Form 990 can lead to serious consequences:
The IRS will send warning letters after each missed year, but many officers ignore or miss them - especially during transitions.
Here’s what to do:
Some treasurers don’t realize they’re responsible for filing even if revenue is low. Don’t just assume it was done - verify it.
Make filing Form 990 a priority every year, and leave clear notes in your chapter’s treasurer transition materials so the next officer doesn’t have to start from scratch.
