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Exempt organization inflation adjusted items for 2025

ARTICLE | October 22, 2024
Authored by RSM US LLP

Executive summary: Annual inflation adjustments for exempt organizations

Revenue Procedure 2024-40 provides annual inflation adjustments for tax years beginning in 2025, reflecting slight increases over 2024 amounts. Exempt organizations with fundraising, lobbying expenses, or annual dues paid by agricultural or horticultural organization members may be affected. Flexible spending account and qualified transportation fringe benefits are also among the items in which exempt organizations, as employers, may be interested. Finally, the daily delinquency penalty for failure to timely file Form 990 series information returns increases to $130 for large organizations.

Inflation adjustments for 2025 impacting exempt organizations

The IRS announced the annual inflation adjustments applicable to tax years beginning in 2025 (typically, returns filed in 2026) for more than 60 tax provisions, including those affecting exempt organizations. Amounts increased slightly for 2025. Of interest to exempt organizations are the following items:

Inflation adjusted item

2025 amount

2024 amount

Agricultural or horticultural organizations:
Dues paid by members excluded from unrelated business income

$207

$201

Low cost articles:
Cost of items for purposes of determining unrelated trade or business

$13.60

$13.20

Insubstantial benefits:
Value of benefits received by a donor without reducing the value of the charitable contribution deduction

$13.60, $68, and $136

$13.20, $66, and $132

Nondeductible lobbying expenditures:
Dues limitation to except an exempt organization from the proxy tax reporting requirement

$143 or less

$140 or less

Failure to file Form 990-T:
Minimum tax that applies for failure to file within 60 days of the due date is the lesser of 100 percent of the amount required to be shown as tax or the following amount

$525

$510

Failure to file Form 990, Form 990-EZ, or Form 990-PF:

  • Large organization threshold
  • Daily delinquency penalty for large organizations
    Not to exceed
  • Daily delinquency penalty for all others
    Not to exceed the lesser of 5 percent of gross receipts or the following amount

 

  • $1,309,500
  • $130
    $65,000
  • $25
    $13,000

 

  • $1,274,000
  • $125
    $63,500
  • $25
    $12,500

As employers, exempt organizations may also be interested in the following items:

Inflation adjusted item

2025 amount

2024 amount

Flexible spending accounts (FSAs):

  • Pre-tax deduction annual limit
  • Maximum carryover amount (if permitted by plan)

 

  • $3,300
  • $660

 

  • $3,200
  • $640

Qualified transportation fringe benefits:
Pre-tax or excluded monthly limit

 

  • $325

 

  • $315

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This article was written by Alexandra O. Mitchell, Lauren Nowakowski, Morgan Souza and originally appeared on 2024-10-22. Reprinted with permission from RSM US LLP.
© 2024 RSM US LLP. All rights reserved. https://rsmus.com/insights/tax-alerts/2024/exempt-organization-inflation-adjusted-items-for-2025.html

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