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

Examples are scholarship loans and low-interest loans to charitable organizations, indigents, or victims of a disaster. For a short year return in which there is no calendar year that ends with or within the short year, don’t report any information in columns (A) through (C), unless the return is a final return. If the return is a final return, report the compensation paid to the independent contractor(s) under the parties’ agreement during the short year or the compensation that is reportable compensation on Form 1099 for the short year, whether or not Form 1099 has been filed yet to report such compensation. Report the total number of individuals, both those listed in the Part VII, Section A, table, and those not listed, to whom the filing organization (not related organizations) paid over $100,000 in reportable compensation during the tax year. Check the “Former” box for former officers, directors, trustees, and key employees only if both conditions below apply. If an employee is a key employee of the organization for only a portion of the year, that person’s entire compensation for the calendar year ending with or within the organization’s tax year, from both the filing organization and related organizations, should be reported in Part VII, Section A.

Public Inspection IRC 6104(d) regulations state that an organization must provide copies of its three most recent Forms 990 to anyone who requests them, whether in person, by mail, fax, or e-mail. The following chart is intended to help section 501(c)(21) black lung trusts identify some of the key lines on Form 990 that correspond with certain lines of Form 990-BL, especially a heading block item and in Part I. A charity that knowingly provides a false substantiation acknowledgment to a donor may be subject to the penalties under section 6701 and/or section 7206(2) for aiding and abetting an understatement of tax liability. If the organization receives a quid pro quo contribution of more than $75, the organization must provide a disclosure statement to the donor. Special rules apply to charitable contributions of motor vehicles, boats, or airplanes with a claimed value of more than $500.

More In Forms and Instructions

Small, tax-exempt organizations with annual gross receipts of up to $50,000 may be required to file an electronic notice (sometimes called an e-Postcard) using Form 990-N unless they voluntarily file the full Form 990 version. Your organization may be exempt from taxes, but it still needs to file an annual tax return using Form 990. Although it may seem like an unnecessary hassle, the government uses IRS Form 990 to ensure tax-exempt organizations conduct business properly and are consistent with their responsibilities. Avoiding Form 990 is a sure way to jeopardize your organization’s exempt status and land it hot water with the IRS. Keep reading to ensure you’re complying with your tax obligations or use the links below to answer your most pressing questions. However, nonprofits that have tax-exempt status with the IRS do have obligations to the IRS, including filing an annual Form 990 or other 990 series information return.

Include all amounts owed on secured and unsecured loans made to such persons. Don’t report on line 5 or 6 (a) pledges or grants receivable, which are to be reported on line 3; or (b) receivables that are excepted from reporting on Schedule L (Form 990), Part II (except for excess benefit transactions involving receivables). If the organization must report loans and other receivables on either line 5 or 6, it must answer “Yes” on Part IV, line 26. Form 990 is an annual information return required to be filed with the IRS by most organizations exempt from income tax under section 501(a), and certain political organizations and nonexempt charitable trusts. Parts I through XII of the form must be completed by all filing organizations and require reporting on the organization’s exempt and other activities, finances, governance, compliance with certain federal tax filings and requirements, and compensation paid to certain persons.

How to Read the Form 990

Only for purposes of completing this return, the filing organization must report any rental income received from an affiliated exempt organization as program service revenue on line 2. Books and records maintained according to generally accepted accounting principles for hospitals, colleges, and universities are more specialized than books and records maintained according to those accounting principles for other types of organizations that file Form 990. Accordingly, hospitals, colleges, and universities can report, as program service revenue on line 2, sales of inventory items otherwise reportable on line 10a. In that event, enter the applicable cost of goods sold as program service expense in column (B) of Part IX. No other organizations should report sales of inventory items on line 2. Complete this table for the five highest compensated independent contractors that received more than $100,000 in compensation for services, whether professional or other services, from the organization.

• If the amount reported on this line is 5% or more of the amount reported on Part X, line 16, answer “Yes” on Part IV, line 11c, and complete Part VIII of Schedule D (Form 990).
• It can’t report the 100% of salary as program expenses simply because the employee spent over 50% of his time on program management.
• Nobody likes taxes or the IRS, but don’t let that stop you from acknowledging the seriousness of filing your 990 annually.
• In order to qualify to file Form 990-EZ, a nonprofit should have gross income of more than $50,000 but less than $200,000 during the past fiscal year.
• The schedule includes information pertaining to financial assistance, community benefits, community building activities, bad debt, Medicare, collection practices, certain management companies, and joint ventures and information regarding requirements under IRC Section 501(r).

If any section 501(c)(15) insurance company (other than life insurance) meets both parts of the following test, then the company can file Form 990 (or Form 990-EZ, if applicable). Gross receipts are the sum of lines 6b(i), 6b(ii), 7b(i), 7b(ii), 8b, 9b, 10b, and 12 (column (A)) of Form 990, Part VIII. An organization that isn’t a related organization to the filing organization. A type of political organization that meets the following requirements.

Types of Forms 990

Private foundations must use Form 990-PF to report on their assets, trustees, officers, grants, philanthropy, and other financial activities. They do not need to submit any of the other 990 forms for nonprofits in addition to this one. The Form 990-PF is required for all tax-exempt organizations that are designated as private foundations, regardless of their financial status.

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. Organizations can meet https://www.bookstime.com/articles/what-is-a-tax-write-off their public disclosure obligations by posting copies of their information returns on the internet. Nonprofits are not required to File Form 990 or 990-EZ if their gross receipts are $50,000 or less as of 2020.

It shouldn’t include contributions from gaming activities, which should be reported on line 1f. Organizations that report more than $15,000 on line 9a must also answer “Yes” on Part IV, line 19, and complete Part III of Schedule G (Form 990). Fundraising events sometimes generate both contributions and income, such as when an individual pays more than the retail value for the goods or services furnished.

Travel costs include the expenses of purchasing, leasing, operating, and repairing any vehicles owned by the organization and used for the organization’s activities. However, if the organization leases vehicles on behalf of its executives or other employees as part of an executive or employee compensation program the leasing costs are considered employee compensation and are reported on lines 5 through 7. Fundraising expenses are the expenses incurred in soliciting cash and noncash contributions, gifts, and grants. Report as fundraising expenses all expenses, including allocable overhead costs, incurred in (a) publicizing and conducting fundraising campaigns; and (b) soliciting bequests and grants from individuals, foundations, other organizations, or governmental units that are reported on Part VIII, line 1. This includes expenses incurred in participating in federated fundraising campaigns; preparing and distributing fundraising manuals, instructions, and other materials; and preparing to solicit or receive contributions.

Include payments by the organization to professional fundraisers of fundraising expenses such as printing, paper, envelopes, postage, mailing list rental, and equipment rental, if the organization is able to distinguish these expense amounts from fees for professional fundraising services reportable on line 11e. Enter the four largest dollar amounts on lines 24a through 24d and the total of all remaining miscellaneous expenses on line 24e. Don’t include a separate entry for “miscellaneous expenses,” “program expenses,” “other expenses,” or a similar general category on lines 24a–d. If the amount on line 24e exceeds 10% of the amount on line 25, column (A), the organization must list the type and amount of each line 24e expense on Schedule O (Form 990).

If an amount is reported on this line, the organization is required to maintain books and records to substantiate any amount reported. Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations must report the total compensation and other distributions provided to disqualified persons and persons described in section 4958(c)(3)(B) to the extent not included on line 5. Also include grants and other assistance paid to third-party providers for the benefit What is a Form 990 of specified domestic individuals. For example, a grant payment to a hospital to cover the medical expenses of a specific patient must be reported on line 2. By comparison, a grant to the same hospital to provide services to the general public or to unspecified charity patients must be reported on line 1. A payment by a governmental agency to a medical clinic to provide vaccinations to the general public is a contribution reported on line 1e.

Overall management usually includes the salaries and expenses of the organization’s CEO and his or her staff, unless a part of their time is spent directly supervising program services or fundraising activities. In that case, their salaries and expenses should be allocated among management, fundraising, and program services. Enter in the line 8a box the gross income from fundraising events, not including the amount of contributions from fundraising events reported on line 1c.