501(c)(19): What It Is, Benefits, Requirements & How to Start

What kind is best for your veteran organization with so many types of nonprofits? Securing 501(c)(19) federal tax exemption is mandatory for nonprofits dedicated to serving United States Armed Forces personnel and veterans. This classification unlocks tax advantages and solidifies an organization's credibility and commitment to its noble cause.

Our comprehensive guide delves into the nuances of 501(c)(19) veterans organizations, eligibility requirements, and the application process, empowering organizations to navigate this critical designation effectively.

Table of Contents

• What is a 501(c)(19)?

• Types of Organizations Exempt Under Section 501(c)(19)

• What's the Difference between 501(c)(3) and 501(c)(19)?

• 501(c)(19) Eligibility and Requirements

• 501(c)(19) Tax Benefits, Limitations, and How It Compares to Other Exemptions

• 5 Steps to Start a 501(c)(19) Veterans Organization

• Funding and Grants for 501(c)(19) Organizations

• Case Study: How Commandery of St. Francis Raised $200,000 Using Zeffy's Ticketing System

• Summing Up on 501(c)(19) Tax Status

• FAQs on 501(c)(19) Nonprofit Organizations

‍

What is a 501(c)(19)?

501(c)(19) is an IRS tax-exempt status for veterans organizations supporting United States Armed Forces veterans and current members. These nonprofits focus on improving the lives of service members, veterans, and their families.

They focus on past or present members through activities such as providing social and recreational opportunities, offering insurance benefits, and advocating for their welfare.

‍

‍

Types of Organizations Exempt Under Section 501(c)(19)

To qualify for 501(c)(19) veterans organization exemption, you must be one of the following:

• A post or organization of past or present U.S. Armed Forces members.

• An auxiliary unit or society of such a post or organization.

• A trust or foundation that benefits these posts or veterans organizations.

These nonprofit organizations must engage in activities that:

• Support the welfare of veterans.

• Assist disabled war veterans and their dependents.

• Provide care and entertainment to hospitalized veterans or current service members.

• Preserve the memory of deceased veterans.

• Participate in patriotic events.

‍

Examples of Organizations Operating as a 501(c)(19) Veterans Organization

• Veterans of Foreign Wars (VFW) of the United States: Their mission is to foster friendship and brotherhood among United States veterans of overseas conflicts. The organization aims to serve the war veterans and the military and advocate on their behalf.

• Military Officers Association of America (MOAA): The organization focuses on military personnel matters, specifically legislation affecting the following:

• Career force

• Retired community

• Veterans of the uniformed services

• Veterans of Foreign Wars Auxiliary (Formerly the Ladies Auxiliary VFW): This organization aims to honor the sacrifices of all uniformed personnel and serve the country's veterans.

‍

‍

What's the Difference between 501(c)(3) and 501(c)(19)?

501(c)(3) nonprofit organizations include public charities and private foundations. Contributions to 501(c)(3) nonprofit organizations are tax deductible. These nonprofit organizations are exempt from sales and property taxes in many states.

Like 501(c)(3) organizations, donors and supporters of a 501(c)(19) veterans organization can deduct their charitable contributions on their federal income tax returns. Tax deductions are applicable only when at least 75% of the organization's membership consists of veterans.

The distinction between these nonprofit organizations lies in the specific communities they both serve.

While some 501(c)(3) nonprofit organizations serve veterans, their goals are not limited to the welfare of the veterans' community only. A 501(c)(19) veterans organization solely works for the betterment of armed forces members and veterans.

‍

501(c)(19) Eligibility and Requirements

To be eligible for 501(c)(19) tax-exempt status, an organization must meet the following criteria:

• Be established in the United States or its possessions.

• Have at least 75% of its members as past or present United States Armed Forces members, cadets, students of college ROTC programs or Armed Services academies, or their spouses, widows, widowers, relatives, or lineal descendants.

• Limit its activities to those specified by the IRS, focusing on the betterment of veterans and service members.

• Ensure that earnings do not benefit any private shareholder or individual.

Auxiliary units, societies, trusts, or foundations associated with veterans' posts or organizations must adhere to additional requirements. Some of these requirements include:

• Being organized according to the bylaws of the parent organization.

• Having a specific membership composition of 75% veterans or spouses of veterans.

• Distributing income for charitable purposes.

A trust or foundation for a veterans' post or organization can access tax-exempt status if:

• It is valid under local law and organized for charitable purposes.

• It has a dissolution provision dictated in section 1.501(c)(3)-1(b)(4) of the Income Tax Regulations.

• Its corpus and income are used only to fund a veterans' post or organization's charitable activities or as an insurance set aside.

• Its income is not accumulated unreasonably.

A substantial portion of the auxiliary organization's income is distributed to a veteran post or organization or for purposes intended for:

• Religion

• Charity

• Science

• Literature

• Education

• Prevention of cruelty to children or animal purposes

‍

501(c)(19) Tax Benefits, Limitations, and How It Compares to Other Exemptions

Now that you understand who qualifies and what the requirements are, it's worth taking a close look at the actual tax benefits — and the restrictions — before you start the application process. Many organizations are surprised by the UBIT rules and the political activity limits. Knowing these upfront saves you from compliance problems down the road.

‍

Federal Tax Exemptions

A recognized 501(c)(19) organization is exempt from federal corporate income tax on income related to its exempt purpose. This includes membership dues, donations, fundraising proceeds, and program revenue tied to serving veterans or military members. This exemption is grounded in IRC Section 501(c)(19) and further clarified in 26 CFR 1.501(c)(19)-1(19)-1).

Notably, 501(c)(19) organizations are also generally exempt from paying FICA (Social Security and Medicare) taxes on wages paid to certain qualifying employees, though this depends on the specific structure and activities of the organization. Consult a tax professional to confirm how this applies to your situation.

For a broader overview of exempt organization rules, IRS Publication 557 (Chapter 4) covers veterans organizations in detail and is a reliable primary reference throughout your compliance work.

‍

State-Level Property and Sales Tax Exemptions

Many states extend additional tax relief to 501(c)(19) organizations, including:

• Property tax exemptions on real estate used for exempt purposes (e.g., a veterans' post building)

• Sales tax exemptions on purchases made for qualifying activities

These exemptions vary significantly by state. Some states automatically recognize organizations with federal 501(c)(19) status; others require a separate state-level application. Check with your state's department of revenue to confirm what's available and how to apply. Getting this wrong means leaving real money on the table — especially if your organization owns or operates a physical facility.

‍

Unrelated Business Income Tax (UBIT)

Like other nonprofits, 501(c)(19) organizations are subject to Unrelated Business Income Tax (UBIT) on income generated from activities not substantially related to their exempt purpose. This is one of the most misunderstood compliance areas for veterans organizations, and it's worth understanding clearly before you expand your revenue streams.

Common examples of income that can trigger UBIT include:

• Running a bar or restaurant open to the general public

• Renting out facilities for commercial purposes unrelated to veterans' programming

• Advertising revenue from publications

If your organization regularly earns income from these types of activities, that income is taxable at standard corporate rates and must be reported on Form 990-T. Occasional or incidental unrelated income generally doesn't trigger UBIT, but consistent revenue streams will. There are specific IRS rules around insurance programs and set-asides that apply to 501(c)(19) organizations — a tax professional familiar with veterans organizations can help you structure these correctly.

The key distinction: income from activities that are substantially related to your exempt purpose (like ticket sales to a veterans' benefit event) stays tax-exempt. Income from activities that primarily serve the general public or commercial interests does not.

‍

Political Activity and Lobbying Restrictions

501(c)(19) organizations have more flexibility here than 501(c)(3)s, but they're not unlimited. The IRS allows these organizations to engage in legislative activities (lobbying) as long as it's not a substantial part of their overall activities. Direct partisan political activity — endorsing or opposing candidates — is generally prohibited.

This means you can advocate for veterans' benefits legislation or push for policy changes that affect military members. You can't use organizational funds to campaign for a political candidate or party. If advocacy is central to your mission, track the time and resources you spend on lobbying carefully to confirm it stays below the "substantial" threshold.

‍

501(c)(19) vs. 501(c)(3) vs. 501(c)(4): Key Differences

‍

One important nuance: donations to a 501(c)(19) are only tax-deductible to the donor if at least 90% of the organization's members are war veterans. If that threshold isn't met, contributions are not deductible — a meaningful distinction when communicating with donors or pursuing major gifts. Make sure you're tracking your membership composition carefully so you can accurately represent this to potential donors.

‍

5 Steps to Start a 501(c)(19) Veterans Organization

• Step 1: Create Your Organization

• Step 2: File the Articles of Incorporation

• Step 3: Acquire an Employer Identification Number (EIN)

• Step 4: Complete Form 1024 to Apply for Tax-Exempt Status

• Step 5: Maintain Your 501(c)(19) Status

‍

1. Create Your Organization

Establishing a 501(c)(19) organization begins by forming a board of directors of individuals committed to serving veterans and current United States Armed Forces members.

Develop a clear mission statement that outlines how your nonprofit will support these communities. Create bylaws that define your organization's structure, leadership roles, and decision-making processes. Ensure these bylaws align with IRS requirements for 501(c)(19) status.

‍

‍

2. File the Articles of Incorporation

Articles of Incorporation are also known as certificates of incorporation or corporate charters. These legal documents must be filed with the Secretary of State in the state where your organization is based.

These articles contain essential business information and officially register your nonprofit with the state. Each state has specific filing requirements, so research the regulations in your state to ensure you have all the necessary documentation before submitting your application.

‍

3. Acquire an Employer Identification Number (EIN)

Every business and organization must register for an EIN to identify your organization on several documents.

Apply for an EIN through the IRS's online application. Ensure that the person applying should be your nonprofit's primary member or decision-maker.

‍

‍

4. Complete Form 1024 to Apply for Tax-Exempt Status

To apply for 501(c)(19) tax-exempt status, you must complete IRS Form 1024.

• Ensure that you select the correct version of Form 1024 for your 501(c)(19) organization and mark the box labeled "M" in Part I.

• The form is 22 pages long and requires detailed information about your organization.

• Carefully review the instructions before completing the form to ensure accuracy and faster processing.

• Pay the required fee ($600 as of 2024) and submit your completed Form 1024 online through Pay.gov.

What documentation to prepare: Before you sit down to complete Form 1024, gather the following:

• Organizational documents: Your Articles of Incorporation, bylaws, and any amendments.

• Financial statements: Actual financial statements if your organization has been operating for one or more years, or projected budgets for at least two to three years if you're newly formed.

• Narrative description of activities: A detailed written explanation of each activity your organization conducts, who it serves, how it furthers your exempt purpose, and how much of your resources it uses.

• Membership records: Documentation showing your membership composition — you'll need to demonstrate that 75%+ are past or present Armed Forces members.

• Any existing contracts or agreements related to insurance programs, facility use, or other recurring activities.

Common reasons the IRS rejects or delays 501(c)(19) applications:

• Incomplete or inconsistent information between the narrative and financial data

• Bylaws that don't clearly restrict earnings from benefiting private individuals

• Membership composition that doesn't meet the 75% threshold on paper

• Failure to demonstrate that activities are limited to IRS-specified purposes

• Missing or incorrect fee payment

Processing timeline: The IRS typically processes Form 1024 applications within three to six months. Complex applications or those requiring additional information can take longer. You can check your application status using the IRS's online tool. Don't wait on your 501(c)(19) determination letter before opening a bank account — you can operate as a nonprofit while your application is pending, but you won't have confirmed tax-exempt status until the letter arrives.

‍

5. Maintain Your 501(c)(19) Status

To maintain the tax-exempt status of your 501(c)(19) organization, ensure that you diligently complete the annual tax filing requirements. It shows that your organization is following all the best practices.

You'll need to file Form 990 to file your tax returns annually. The form updates the IRS with your organization's activities and finances throughout the year.

Form 990 should be available for everyone to see how your nonprofit operates. Check the financial status requirements to choose the right version of Form 990 for your organization.

‍

‍

Funding and Grants for 501(c)(19) Organizations

Getting your 501(c)(19) status is a major milestone — but it's only the beginning. The next challenge is finding the funding to sustain and grow your programs. Here's what's available at the federal, state, and private foundation levels specifically for veterans organizations.

‍

Federal Grant Programs

The federal government offers several grant and funding programs that 501(c)(19) organizations can access directly or through partnerships.

Department of Veterans Affairs (VA) grants: The VA administers several grant programs for organizations that serve veterans. The VA Supportive Services for Veteran Families (SSVF) program funds nonprofits that help veterans who are homeless or at risk of homelessness. The VA's National Cemetery Scheduling Office also funds qualifying projects through the Veterans Cemetery Grants Program for state and tribal organizations. Eligibility and application requirements vary by program, so review each program's Notice of Funding Opportunity (NOFO) carefully.

Department of Defense (DoD) programs: The DoD supports organizations that serve active duty members and their families through programs like the Military Community and Family Policy grants. These are typically directed toward organizations that provide direct services — financial counseling, childcare support, emergency assistance — to military families. Check the DoD's open funding opportunities through Grants.gov.

Other federal sources: The Substance Abuse and Mental Health Services Administration (SAMHSA) funds programs addressing mental health and substance use issues among veterans. The Department of Labor's Veterans' Employment and Training Service (VETS) funds workforce programs for transitioning service members. Search Grants.gov regularly and set up keyword alerts for "veterans" to catch new federal opportunities as they open.

‍

State-Level Veteran Grant Programs

Most states have a dedicated Department of Veterans Affairs or Veterans Services office that administers state-funded grant programs for veterans organizations. These programs typically fund:

• Direct service programs (transportation, housing, food assistance)

• Memorial and recognition events

• Outreach and peer support services

• Facility improvements for veterans' posts

Funding availability and application timelines vary widely by state. Start by contacting your state's veterans affairs office directly and asking what grant programs are open to 501(c)(19) organizations. Some states also route federal Community Development Block Grant (CDBG) funds through local governments that can be accessed by nonprofits serving veterans.

‍

Private Foundation Grants

Private foundations are another meaningful source of funding — though 501(c)(19) organizations face a real limitation here. Many private foundations restrict their grantmaking to 501(c)(3) organizations because contributions to 501(c)(3)s are fully tax-deductible for the foundation. If your organization isn't a 501(c)(3), some foundations won't be able to fund you.

That said, several foundations do specifically fund 501(c)(19) veteran organizations:

• The Bob Woodruff Foundation funds programs that help post-9/11 veterans and their families thrive.

• Gary Sinise Foundation supports active duty military, veterans, first responders, and their families.

• The Fisher House Foundation funds programs that support military and veteran families during medical treatment.

• Community foundations in your region often have veteran-specific funding pools — check your local community foundation's grant database.

When approaching private funders, be upfront about your 501(c)(19) status and whether your donor tax-deductibility threshold qualifies. If at least 90% of your members are war veterans, lead with that fact — it makes a meaningful difference in a foundation's ability to count your organization as a qualifying grantee.

‍

Tips for Strengthening Your Grant Applications

Whether you're applying for federal, state, or private funding, a few principles apply across the board. Document your programs thoroughly — funders want to see who you serve, what outcomes you produce, and how you measure success. Keep your Form 990 and financial statements current, since most funders require them. Build relationships with program officers before you apply; a brief introductory conversation can save you hours of misdirected application work. And don't overlook smaller, local grants — they're often less competitive and can fund critical operating needs while you build toward larger awards.

‍

Case Study: How Commandery of St. Francis Raised $200,000 Using Zeffy's Ticketing System

The Commandery of St. Francis, OSJ, a 501(c)(19) organization, hosted its 12th Annual Wounded Veterans' Polo Benefit in 2023. By using Zeffy, a 100% free ticketing system, the event raised an impressive $200,000 to support wounded veterans.

Zeffy made it possible for us to put every dollar raised directly toward our veterans. The platform handled everything seamlessly — we didn't lose a cent to platform fees, and our team could focus entirely on the mission.
— Event Organizer, Commandery of St. Francis, OSJ

Zeffy's zero-fee model allowed the organization to save $10,000 in platform and transaction fees, ensuring more funds directly benefited the veterans in need. This successful event exemplifies the power of dedicated nonprofits and the importance of choosing the right fundraising tools.

‍

Summing Up on 501(c)(19) Tax Status

Obtaining 501(c)(19) tax-exempt status is a significant milestone for nonprofit organizations supporting United States Armed Forces veterans.

By following the IRS requirements and application process, your nonprofit can gain access to valuable tax benefits. Establish your nonprofit as a trustworthy entity committed to serving the veteran community's past or present members.

After securing your 501(c)(19) status, choose Zeffy, a 100% free fundraising platform designed for nonprofits. Trusted by 100K+ nonprofits who have raised over $2B+ combined, Zeffy lets you focus on your mission of improving the lives of veterans and service members without worrying about any hidden charges.

‍

‍

FAQs on 501(c)(19) Nonprofit Organizations

‍

‍

‍

‍