Wikipedia:Wikipedia Signpost/2005-04-18/Tax exempt status

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Tax exempt status

Wikimedia Foundation granted tax exemption

The Wikimedia Foundation announced last week that it had officially been recognized as a tax-exempt charitable organization in the United States, almost two years after the Foundation was created, with the exemption being retroactive to its founding.

Foundation president Jimmy Wales reported last Saturday that he had received a letter from the IRS confirming that the Wikimedia Foundation would be considered a public charity under title 26 (Internal Revenue Code), section 501(c)(3) USC. This communication, confirming what had long been anticipated, came just over six months after submitting a final application for recognition of non-profit status.

The tax exemption will allow American taxpayers to deduct contributions to Wikimedia on their income tax returns if they itemize deductions. Since the decision is retroactive to the Wikimedia founding date of 20 June, 2003, all contributions made to the Foundation since then are considered tax-deductible.

Wikimedia CFO Daniel Mayer noted that unfortunately this came one day after 15 April, the deadline for people to send in their income tax returns. He indicated that the Foundation would be emailing individual donors with the information. If the donation is significant enough to justify the effort, an amendment can be filed to take advantage of the deduction for the 2003 or 2004 tax years, and obtain any return that would be due. An amendment is filed with form 1040X (pdf file).

In addition, this may make it easier for Wikimedia to find new sources of funding, since many grant-making organizations make qualification for 501(c)(3) status a requirement as part of their grant applications.