Can a homeschool be tax exempt and obtain grants?

Dear Carol:
I am interested in writing proposals for grants for my family’s home school. As an individual home school, not as a home school support group, I want to apply to receive small amounts of money for travel, museum entry, art gallery entry, books, posters, etc. More often than not, I find this statement :

“All applicant organizations or sponsoring agencies must be exempt from federal taxation under the Internal Revenue Code Section 501, in order to be eligible for funding.”

What do I have to do to have our home school be exempt from federal taxation?

Thanks.

Nancy H., Mississippi

Nancy,

You asked an excellent question. You are correct that many fund raising organizations now require 501c3 tax exempt status. Some homeschool groups want to become 501c3 tax exempt organization just so that they can participate in some fund raisers. I have a homeschool co-op as a client right now applying for 501c3 status.

A private individual or family cannot be a 501c3 tax exempt organization. The reason is that the IRS does not allow tax exempt organizations to offer private benefits or what they call “inurement” (meaning to become beneficial or advantageous) to individuals. Tax exempt organizations must benefit a group, preferably the general public.

I have been asked your question before so I wrote about it on my blog. Here’s the link: Can my family’s homeschool be a nonprofit?

You might also read my blog entry on doing a family fund raiser: Can my individual homeschool have a fundraiser?

I hope that helps!

Carol Topp, CPA

Comments

  1. Bro. Bill McCrary says:

    Was wondering if you knew about a property tax exemption for homeschools. we have a family in our Church who is seeking this exemption and we do not know where to search. this article is very informative and interesting. thanks for the info! Bill

  2. Carol Topp says:

    Bill,
    Property tax exemptions vary by state and even locality. Most states/municipalities offer property tax exemptions to churches, schools and other charitable organizations.

    Some states/municipalities offer individuals tax exemption or tax reduction, typically to veterans, seniors or clergy.

    A individual family does not usually qualify for property tax exemption because they are not a church or qualified charity.

    Carol Topp, CPA

  3. I am new to homeschooling, however from what I understand, in the state of Texas, any Homeschool is considered a “Private School” under Texas Law unless you are enrolled in a public school curriculum taught in a homeschool setting.

  4. Carol Topp says:

    Tammy, you are correct that Texas classifies homeschools as private schools, but that’s not the way the IRS sees a family homeschool for 501c3 tax exempt status.

    The IRS defines private school quite differently than Texas.

    I discussed this in another blog post Can my family’s homeschool be a nonprofit?

    Carol Topp, CPA

  5. Tammy says:

    Hi! I was wondering if it is possible for a individual homeschool to apply for grants?

  6. Carol Topp says:

    Tammy, you can try and apply for a grant but I doubt you would be successful because most granting organizations will only give money to 501(c)(3) charities, not individuals. Individuals are not eligible for 501(c)(3) status as I explained in the blog post.

    Some homeschool organizations offer reduced tuition or scholarships to needy families, but few offer an outright grant of money.

    Carol Topp, CPA

  7. Stephanie says:

    I found a site called gofundme.com anyone can start a fundraiser for ANYTHING. Gonna try it out for my kids homeschooling :)

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