Form 990: Return of Organization Exempt from Income Tax Overview


Form 990

Certain goods or services disregarded for substantiation and disclosure purposes. To deduct a contribution of a cash, check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee’s name, date, and amount of the contribution. See section 170(f)(17) and Regulations section 1.170A-15 for more information. In the case of a text message contribution, the donor’s phone bill meets the section 170(f)(17) recordkeeping requirement of a reliable written record if it shows the name of the donee organization and the date and amount of contribution.

Form 990

This 200% tax can be abated if the excess benefit transaction is subsequently corrected during a 90-day correction period. In the case of multiple affiliated organizations, the determination of whether a person has substantial influence is made separately for each applicable tax-exempt organization. A person may be a disqualified person for more than one organization in the same transaction. An organization isn’t treated as a section 501(c)(3), 501(c)(4), or 501(c)(29) organization for any period covered by a final determination that the organization wasn’t tax exempt under section 501(a), so long as the determination wasn’t based on private inurement or one or more excess benefit transactions. A disregarded entity is treated as a separate entity for purposes of employment tax and certain excise taxes. For wages paid after January 1, 2009, a disregarded entity is required to use its name and EIN for reporting and payment of employment taxes.

Where can I find an organization’s Form 990 or 990-PF?

All references to a section 501(c)(3) organization on the Form 990, schedules, and instructions shall include a section 4947(a)(1) trust (for instance, such a trust must complete Schedule A (Form 990), unless expressly excepted). If the calculated member income percentage for a section 501(c)(12) organization is less than 85% for the tax year, then the organization fails to qualify for tax-exempt status for that year, and it must file Form 1120, U.S. Corporation Income Tax Return, in lieu of Form 990 or 990-EZ for the year. However, failing the 85% Member Income Test in one year doesn’t cause permanent loss of tax-exempt status under section 501(c)(12).

  • Check the “Former” box for the former five highest compensated employees only if all four conditions below apply.
  • However, the cost to the charity may be used in determining whether the benefits are insubstantial.
  • Combine amounts from inside and outside the United States and report the total for each item.
  • 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.
  • An “institutional trustee” is a trustee that isn’t an individual or natural person but an organization.
  • Public inspection and distribution of applications for tax exemption and annual information returns of tax-exempt organizations.

Reportable compensation generally refers to compensation reported in box 1 or 5 (whichever amount is greater) of Form W-2, Wage and Tax Statement; box 1 of Form 1099-NEC; and box 6 of Form 1099-MISC. Organizations must also report other compensation in Part VII, as discussed in the instructions for Part VII, Section A, column (F), later. If “Yes,” describe on Schedule O (Form 990) the class or classes of such persons and the nature of their rights. Both are CEOs of publicly traded corporations and serve on each other’s boards. The relationship between H and J is a reportable business relationship because each is a director or officer in the same business entity.

Form 990s and more: a quick tax guide for small nonprofits

Use of Form 1040A was limited to taxpayers with taxable income below $100,000 who took the standard deduction instead of itemizing deductions; it was originally one page until the 1982 edition, when it expanded to two pages. Nonprofits filing their tax returns late may receive a maximum penalty of up to $10,000 or 5% of the organization’s gross receipts. Nonprofits must file their tax returns at the same time as every other organization, on the 15th day of the 5th month after the end of their fiscal year.

  • Report the highest dollar amount of reserves the organization maintains on hand and reports to a state in which the organization is licensed to issue qualified health plans.
  • For purposes of Schedule H (Form 990), Hospitals, a hospital, or hospital facility, is a facility that is, or is required to be, licensed, registered, or similarly recognized by a state as a hospital.
  • If an amount is reported on this line, the organization is required to maintain books and records to substantiate any amount reported.
  • If an amount is reported here, answer “Yes” on Part IV, line 11a, and complete Schedule D (Form 990), Part VI.

See the instructions for Form 4720, Schedule I, for more information regarding these disqualified persons. The following is a list of special instructions for the form and schedules regarding the reporting of a joint venture of which the organization is a member. The requester has the option of requesting from the central or parent organization, at its principal office, inspection or copies of group returns filed by the central or parent organization.

Are small organizations required to file tax returns?

For example, report expenses for employee events such as a picnic or holiday party on line 9. Don’t include contributions on behalf of current or former officers, directors, trustees, key employees, or other persons that were included on line 5 or 6. All reportable compensation paid by the filing organization must be reported. Part VII, Section A, requires reporting of officers, directors, trustees, key employees, and up to five of the organization’s highest compensated employees. Compensation from related organizations must also be taken into account in determining a person’s compensation and reported in Part VII, Section A, columns (E) and (F).

Form 990

See the instructions for Bookkeeping, tax, & CFO services for startups, Part V, lines 6a and 6b, for rules on public notice of nondeductibility when soliciting nondeductible contributions. Most states require that all amounts be reported based on the accrual method of accounting. State or local filing requirements can require the organization to attach to Form 990 or 990-EZ one or more of the following. Used to report net income from qualified intellectual property to the IRS and the donor. Go to to view, download, or print all of the forms, instructions, and publications you may need. The IRS can refute the presumption of reasonableness only if it develops sufficient contrary evidence to rebut the probative value of the comparability data relied upon by the authorized body.