QCCO vs. NQCCO and why you should care

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Why does it matter? It is extremely important for you to know if your organization’s current status as a qualified church-controlled organization (QCCO) or non-qualified church-controlled organization (NQCCO) is correct. Although your organization told GuideStone whether it is a QCCO or NQCCO when your plan was established, your status can change over time, especially if your source of funding or services provided has changed.

If the status is NQCCO, you’ll need to follow special nondiscrimination rules that don’t apply to churches, or QCCOs. If a NQCCO does not comply with the rules applicable to it, the IRS could take action with adverse tax consequences to all participants in the plan. Your organization’s status also affects (1) whether your plan document must cover 403(b)(1) and 403(b)(7) contracts; and (2) what type of deferred compensation plans (such as Code section 457 plans) may be offered to your employees.

If you do not determine your status correctly, your organization as well as your employees could suffer adverse tax consequences if you don’t understand the rules that apply.


What are the general rules? There are notable differences in requirements of QCCO and NQCCO organizations, some of the main differences are:

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What should you do? Periodically review your employer’s status as a QCCO or NQCCO. If the determination was close, for instance if the funding your organization receives from outside sources is close to 25% of your organization’s total operating expenses, you should review your organization’s status annually.


How can GuideStone help? GuideStone’s Status Certification Form can help you determine if your organization is a QCCO or a NQCCO. Contact your Relationship Manager for information about how to complete the Status Certification Form.


This information should not be considered tax or legal advice. GuideStone 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.

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