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A Guide To Form 990 For Tax-Exempt Organizations

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A Guide To Form 990 For Tax-Exempt Organizations

Reading Time: 5 minutes

What is Form 990?

Although many nonprofit organizations are exempt from paying federal taxes, the IRS requires tax-exempt organizations to file Form 990 for informational purposes. The IRS uses this informational return to determine whether you’re still exempt from federal taxes. They evaluate your nonprofit’s operations, mission, programs, and financial health.

Why is Form 990 important?

The IRS uses Form 990 to decide whether your nonprofit can keep its tax-exempt status. As an informational return, it documents your financial information, including revenue, expenses, assets, and liabilities. Your return also describes your organization’s governance, yearly activities, and accomplishments. This information helps the IRS ensure that your organization still qualifies for its tax-exempt status.

Who is required to file Form 990?

Organizations required to file an informational return include tax-exempt organizations (under section 501(a), some political organizations, and nonexempt charitable trusts. Depending on your organization’s type and activities, additional schedules may be required as well. Completing Part IV of Form 990 will help you decide which schedules you must file with your Form 990.

If you are not required to file a return and choose to file one anyway, you must fully complete it, along with all the necessary schedules.

What are the different types of Form 990?

There are three variants of Form 990: 990-N, 990-EZ, and 990-PF. The form required of your organization depends on its type, gross receipts, and total assets.

Form 990-N

If your organization has annual gross receipts totaling $50,000 or less, you may file Form 990-N. You can also submit Form 990 or Form 990-EZ if you prefer. 

You should not file Form 990-N if:

  • Your organization is included in a group return
  • Your organization is a church or church-associated convention or association
  • You’re required to file another type of return for your organization

 You will need eight pieces of information to file Form 990-N:

  1. Your Employer Identification Number (EIN) or Taxpayer Identification Number (TIN)
  2. The tax year for which you’re filing the e-Postcard
  3. Legal name and any alternative names
  4. Mailing address
  5. Name and home address of a principal officer
  6. Website URL (if you have one)
  7. Proof that the organization’s annual gross receipts are $50,000 or less
  8. (Optional) A statement that confirms your organization’s termination. This is only required if your organization is terminated.

Once you’ve gathered the required information, read the user guide provided by the IRS to learn how to register and file your Form 990-N online. You’ll file Form 990-N on the IRS’ dedicated webpage for filing Form 990-N (e-Postcard).

Form 990-EZ

Form 990-EZ is the short form of the information return that tax-exempt organizations, including political organizations, are required to file with the IRS each year. Depending on the activities and type of organization, additional schedules may need to be completed.

If your organization has annual gross receipts totaling less than $200,000 and total assets less than $500,000, you are required to file Form 900-EZ. You should not file Form 990-EZ if your organization doesn’t meet these requirements or is one of the exceptions described in the IRS’ 990-EZ instructions.

Form 990-PF

This form is used by private foundations within the U.S. to calculate taxes related to investment income and to report charitable distributions and activities. Exempt and taxable private foundations and certain nonexempt charitable trusts are required to file Form 990-PF.

When do I file my Form 990?

Nonprofit returns are due on the 15th day of the 5th month following the close of your tax year. If your organization is terminated, liquidated, or terminated, your return is due by the 15th day of the 5th month following the date of its liquidation, dissolution, or termination. 

How do I file Form 990?

  1. Download Form-990 from the IRS website
  2. Complete your return, following the IRS’s instructions
  3. Mail your return to the following address:

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0027

If your organization’s headquarters is located in a foreign country or U.S. possession, mail your organization’s return to the following address:

Internal Revenue Service Center

P.O. Box 409101

Ogden, UT 84409

To file your nonprofit’s return and any attachments electronically, search for an authorized IRS e-file provider near you on the IRS’s website.

How do I request a filing extension for Form 990?

If you need to request a filing extension, use Form 8868, Application for Automatic Extension of Time To File an Exempt Organization Return, to request a 6-month extension of time to file. You can either use the paper form or file electronically using an IRS-authorized e-File provider.

What are the penalties for not filing Form 990 on time?

Failing to file your return on time will incur a penalty of $20 per each day following the due date. If your organization has gross receipts of more than $1,046,500, you will face a penalty of $100 per day after the return’s due date. Under section 6652(c)(1)(A), the penalty is less than or equal to the lesser of $10,000 or 5% of your organization’s gross receipts. You may be able to avoid this penalty by providing proof of a reasonable cause for your late filing, like a fire or natural disaster.

What are the penalties for filing an incomplete Form 990?

If you file an incomplete or inaccurate return for your nonprofit, the IRS will mail you a request for the missing or correct information with a specific deadline. If you fail to provide the required information within that period, you will face a penalty of $10 per day following the due date for the required information. The maximum penalty amount for individuals who incorrectly file a nonprofit return is $5,000.

Which schedules do I need to attach to Form 990?

Part IV of Form 990, Checklist of Required Schedules, helps you determine which schedules to file with your nonprofit’s return. Here is a general explanation of each form and when you may need to file them:

  • Schedule B: To report donors who contributed more than $5,000, attach a Schedule B to your tax return.
  • Schedule D: Use Schedule D to report supplemental financial information, including but not limited to donor-advised funds and endowment funds. See the IRS’s instructions for details.
  • Schedule H: This form lets you provide information on the activities and policies of your healthcare and hospital facilities. See the IRS’s instructions for more details.
  • Schedule I: Use this form to provide information on grants and other assistance you’ve provided to domestic organizations, governments, and individuals within that tax year. The IRS has included filing instructions within Schedule I.
  • Schedule J: Use Schedule J to report certain compensation practices and information for specific officers, directors, trustees, and employees.
  • Schedule K: This form lets you describe certain information on outstanding liabilities related to tax-exempt bond issues. See the IRS’s instructions for more details.
  • Schedule M: Attach this form to report noncash contributions you received during that tax year. The IRS has included filing instructions within Schedule M.
  • Schedule N: Attach this schedule to report your organization’s termination or dissolution, or the liquidation or disposition of more than 25% of its assets. The IRS has included instructions within Schedule N.
  • Schedule O: Use Schedule O if you need to provide detailed responses to the questions on Form 990 or Form 990-EZ. The IRS has included instructions within Schedule O.

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