Exempt raffles mean that the organization is not taxed on the winnings of the raffle. When flagged as an Exempt Raffle, the raffle’s net receipts are backed out of the tax calculations for the organization within the tax return.
The following is MN Department of Revenue’s definition of what qualifies to be reported as an exempt raffle as found on the Schedule ER tax form:
You may conduct tax-exempt raffles if the net proceeds are used exclusively to help relieve the effects of poverty, homelessness or disability for an individual or family.
To flag the raffle as an Exempt Raffle, once the audit of the session is complete, change the dropdown in the center from Report as Taxable Raffle to Report as Tax Exempt Raffle. This will then update the Tax Return details so the organization is not taxes on the exempt raffle activity.