Understanding Unrelated Business Income and Its Tax Implications

January 2025 Typically, nonprofit organizations in the United States are granted tax-exempt or 501(c)(3) status, meaning they are not taxed by the federal government on income that's directly related to business activities. However, this doesn't necessarily mean that all nonprofit income is exempt from taxation. Not only can nonprofit income be taxed at the state level, but some types of income may also be taxed federally under a term known as “unrelated business income tax." View the full article here.