About Form 990, Return of Organization Exempt from Income Tax Internal Revenue Service

Form 990

When nonprofits fail to file 990s for three years in a row, the IRS automatically revokes their tax-exempt status. Those organizations may apply to have it reinstated by sending in a new application and paying a fee. Nonprofits commit to serve an “approved purpose” – such as fighting bigotry, protecting animal welfare or sheltering the homeless – and meeting other eligibility rules. In exchange, they generally don’t pay taxes on the donations they receive or other sources of income. But they must file either this 12-page form or a shorter version of it, in which they report information about their finances, leadership and activities.

  • Generally, tax returns and return information are confidential, as required by section 6103.
  • Additionally, most states rely on the Form 990 to perform charitable and other regulatory oversight and to satisfy state income tax filing requirements for organizations claiming exemption from state income tax.
  • Usually, records that support an item of income, deduction, or credit must be kept for a minimum of 3 years from the date the return is due or filed, whichever is later.
  • The organization maintains its books on the cash receipts and disbursements method of accounting but prepares a Form 990 return for the state based on the accrual method.
  • Even though donated services and facilities may be reported as items of revenue and expense in certain circumstances, many states and the IRS don’t permit the inclusion of those amounts in Parts VIII and IX of Form 990, Part I of Form 990-EZ, or (except for donations by a governmental unit) in Schedule A (Form 990).

An organization eligible to submit -N can instead choose to file Form 990 or Form 990-EZ to satisfy its annual reporting requirement. Nonprofits can request an automatic three-month extension to file all information returns by submitting Form 8868, Application for Extension of Time to File an Exempt Organization Return. Nonprofits are required to attach Schedule A to their Form 990 or 990-EZ return. An organization isn’t required to file Schedule A if it isn’t required to file Form 990 or 990-EZ.

Form 990-EZ

Report the subtotals of compensation from duplicate Section A tables for filers that report more than 25 persons in the Section A, line 1a, table in line 1c, columns (D), (E), and (F). For a short year return in which there is no calendar year that ends with or within the short year, leave column (F) blank, unless the return is a final return. If the return is a final return, report the other compensation for the short year from both the filing organization and related organizations. For each person required to be listed, enter the name on the top of each row and the person’s title or position with the organization on the bottom of the row. The use of a leasing company, common paymaster, payroll/reporting agent, or other payroll service provider doesn’t relieve an employer of its obligation for employment tax liabilities.

Form 990

In the case of section 501(c)(3), 501(c)(4), and 501(c)(29) organizations, it can also be an excess benefit transaction taxable under section 4958 and reportable on Schedule L (Form 990). If the organization is required to file Form 8282, Donee Information Return, to report information to the IRS and to donors about dispositions of certain donated property made within 3 years after the donor contributed the property, it must answer “Yes” and indicate the number of Forms 8282 filed. Answer “Yes” if the organization was included in consolidated, independent audited financial statements for the year for which it is completing this return. All other organizations answer “No.” Answer “Yes” if the organization is reporting for a short year that is included in, but not identical to, the period for which the audited financial statements were obtained. See the instructions for Schedule D (Form 990), Part V, for the definitions of these types of endowment funds. Check this box if the organization has terminated its existence or ceased to be a section 501(a) or section 527 organization and is filing its final return as an exempt organization or section 4947(a)(1) trust.

The Breadth of Nonprofit Explorer data

Report the following persons based on reportable compensation and status for the calendar year ending within the fiscal year. To determine which persons are current or former officers, directors, trustees, key employees, or highest compensated employees, see the instructions for Part VII, Section A, column (C), later. If a section 4947(a)(1) nonexempt charitable trust has no taxable income under subtitle A, its filing of Best Law Firm Accounting Bookkeeping Services in 2023 can be used to meet its income tax return filing requirement under section 6012. Such a trust must, if it answers “Yes” on line 12a, report its tax-exempt interest received or accrued (if reporting under the accrual method) during the tax year on line 12b. The statement must be in an easily recognizable format whether the solicitation is made in written or printed form, by television or radio, or by telephone. A disqualified person corrects an excess benefit by making a payment in cash or cash equivalents equal to the correction amount to the applicable tax-exempt organization.

Starting in 2009, all Forms 5500 must be filed electronically on the website of the Department of Labor. Donors and foundations will research your organization’s tax returns to better understand your organization’s financial health. Do your due diligence to determine which form best fits your organization. Consult an attorney if you’re about to do this for the first time and cannot be completely sure.


In column (D), report any revenue excludable from unrelated business income by section 512, 513, or 514. Examples of such revenue include receipts from the sale of donated merchandise, interest (unless debt-financed), and receipts https://turbo-tax.org/best-law-firm-accounting-bookkeeping-services-in/ from bingo games. Complete Schedule J (Form 990) for each individual listed in Section A who received or accrued more than $150,000 of reportable and other compensation from the organization and related organizations.

Noncash contributions are anything other than cash, checks, money orders, credit card charges, wire transfers, and other transfers and deposits to a cash account of the organization. Value noncash donated items, like cars and securities, as of the time of their receipt, even if they were sold immediately after they were received. The following are examples of governmental grants and other payments that are treated as contributions and reported on line 1e.

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