I took a look at the 1023-EZ worksheet to see if we qualify for filing as a tax exempt organization. Question #11 asks if we are an educational facility. Then it goes on to define what they mean. I do not know how our organization would not fall into that category. Our goal is to support homeschooling families by providing weekly classes for middle and high school students. We do make it clear that our tutors are working alongside parents. Parents have the final decision on the grade their student will receive for the class. So, what do you think? Does that mean we do not qualify to apply for tax exempt status?
Form 1023-EZ Eligibility Checklist Question #11 asks if your origination is a school, college or university described in section 170(b)(1)(a)(ii). That part of the Internal Revenue Code describes a school. I do not consider homeschool programs to be a school as the IRS defines “school.”
One aspect of a school is a “regular faculty,” which the IRS defines as
“qualified teachers instruct the students, and the same teachers do so on a recurrent basis.”
Source: Internal Revenue Manual viewed https://www.irs.gov/irm/part7/irm_07-026-002.html#d0e549 on 5/11/15.
And by “qualified” the IRS means:
“certifications by the appropriate state authority or successful completion of required training.”
Source: Instructions for Form 1023
So when you look beyond the Eligibility Checklist into the guts of the IRS code, you’ll probably agree with me that homeschool organizations are not schools because they do not have regular, “qualified” faculty. Most of the teachers in your homeschool organization may be qualified to teach a class at your homeschool co-op, but are not state certified, nor trained as teachers.
Your homeschool organization (probably) qualifies to be a 501(c)(3) tax exempt organization as an educational organization, but not as a school.
I hope that helps!
Carol Topp, CPA
Great answer to a very important question! It’s important to keep these things in mind when running a homeschool group like this. Thanks for sharing your insight!
What if some of the teachers are qualified according to state law? Some terms, all of our teacheres may be qualified, other times some of them aren’t. It just depends who is available to teach the classes we want.
It seems there must still be some other criteria, or community ed programs would be considered schools. Does it have to do with all students already being enrolled in another school (ie their private homeschool?).
Yes, you are correct that other factors help determine if an educational program is a school or a homeschool program including if the program is meeting compulsory attendance rules set by the state (which would make them a school) and if the parents legally homeschooling according to their state laws (which would mean the program is NOT a school).
It didn’t used to be so difficult to distinguish between a school and a homeschool program!
Carol Topp, CPA