Arizona 501(c)(5) Attorneys 

Reliable Counsel for the Formation & Operation of Labor Organizations 

Labor and agricultural unions can form and operate as 501(c)(5) organizations to qualify for nonprofit exemption status. Although 501(c)(5) organizations have a duty to provide service to their members first, they can make unlimited corporate, individual, or union contributions. 501(c)(5) organizations can also perform some political activities and attempt to influence legislation that is related to the common union interests of its members.

501(c)(5) organizations that expressly advocate for the election or defeat of a particular political candidate and spend more than $250 during a calendar year are required to disclose the name of each person who contributed more than $200 during the calendar year to the Federal Election Commission. 

Benefits of Forming & Operating Under 501(c)(5)

501(c)(5) organizations can receive unlimited contributions from corporations, individuals, and labor unions. The names and addresses of contributors also don’t have to be disclosed for public inspection. However, all other information, including the number of contributions, the description of noncash contributions, and any other information must be made available for public inspection unless it identifies the contributor.

Union membership dues paid to a 501(c)(5) organization are generally considered an ordinary and necessary business expense and are tax-deductible unless a substantial part of the 501(c)(5) organization's activities consists of political activity, in which case a tax deduction is allowed only for the portion of membership dues that are for other activities.

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