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Church-Controlled Organization (vs. Qualified) Definitions |
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| This information should not be considered tax or legal advice. The Board of Pensions stands ready to assist your organization as you work with your legal and tax advisers by providing resource information that you and your adviser may find beneficial. |
It is important to
determine whether your organization is a non-qualified church-controlled
organization (“non-QCCO”) or a qualified church-controlled
organization (“QCCO”) because the requirements under the final
regulations are more extensive for non-QCCOs. |
| Non-QCCO generally refers to any church-controlled, tax-exempt organization described in Code section 501(c)(3), that: | |
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1)
offers goods, services, or facilities for sale, other than on an
incidental basis, to the general public, other than goods, services, or
facilities which are sold at a nominal charge which is substantially
less than the cost of providing such goods, services, or facilities; and 2) normally receives more than 25% of its support from either (a) governmental sources or (b) receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities which are not unrelated trades or businesses, or both. Examples
of non-QCCOs are church-affiliated hospitals, universities, children’s
homes, and retirement housing facilities. |
| QCCO generally refers to a church-controlled 501(c)(3) tax-exempt organization that: | |
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1)
does not generally offer goods, services, or facilities for sale to the
general public; or 2) receives less than 25% of its financial support from government grants or receipts from goods and services in related activities or business Examples
of QCCOs are General Assembly agencies and entities, and seminaries.
Churches, and church-related primary and secondary schools,
though not technically QCCOs, have to follow the same rules as QCCOs. |
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Non-QCCOs, like QCCOs and churches, are qualified to participate in church plans. However, non-QCCOs must comply with the nondiscrimination testing, universal availability and certain other requirements under the final regulations that are not applicable to churches and QCCOs. |
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Board of
Pensions of the Church of God |
