Though exempt organizations are not subjected to taxation, still they need to report their activities to the IRS every year. Now, this 501c3 reporting requirement was emphasized by the IRC (Internal Revenue Code) and is done using Form 990, Return of Organization Exempt From Income Tax. Also, these type of organizations are those who are exempted under the IRC Section 501(c) (various kinds of charitable firms), 4947(a)(1) (nonexempt charitable trusts), or 527 (political organizations).

Tax Form 990 - An Overview

Nonprofit tax Form 990 is a tax document which is filed each year by the federal tax-exempt organization with the IRS. Also, it is even filed by charitable nonprofits too. It is easy for the public and IRS to evaluate nonprofits if they file 990 online. This form collects all the required information related to the organization like programs, mission, and finances. In addition, the Form 990 provides each nonprofit the opportunity to disclose what they have achieved in the prior year. So, it helps in retaining their tax-exempt status.

Know more about nonprofit tax filing and reporting requirements

Which Nonprofits Need To File Tax Form 990?

It is mandatory for various tax-exempt organizations who are having gross receipts of $200,000 or assets whose worth is $500,000 to file Form 990 each year.

Organizations who are tax-exempt under the Section 501(c), 4947(a)(1) or 527 of the US tax code.

  • Nonprofits having gross receipts of more than $50,000 need to file Form 990-EZ or 990.
  • Small nonprofits having gross receipts of $50,000 or less should file 990-N. This is done to maintain their tax-exempt status.
  • It is mandatory for all private foundations to file 990-PF irrespective of their size.

When Is The Due Date To File Tax Form 990?

The due date for filing Form 990 is on the 15th day of the 5th month after the end of the organization’s taxable year. So, it means that if the organization is following the calendar year (January 1 – December 31), the Form 990 would be due on May 15th of each year.

Organizations which fail to file the required 990 Form for three consecutive years will risk in getting their tax-exempt status revoked.

What Are The Information Reported On Tax Form 990?

For Nonprofit tax filing, your 990 Form needs to have information related to your organization like its mission and other major activities. The organization must disclose the financial details based on its expenses, revenues, liabilities, and assets.

Now the IRS needs to make sure that the organization is worthy or can maintain its tax-exempt status. For that, it needs more details regarding the kind of activities it engages in the given year.

A huge part of the 501c3 tax returns requires information related to how the organization is governed, and the names of the directors, officers, highly compensated employees and other individuals who are involved in handling the organization. Those organization who over-compensates the management will end up in jeopardizing their tax-exempt status with the IRS.

Attachments to Tax Form 990

There are various attachments that need to be filed along with Form 990 and it is named as schedules. There are about 16 schedules for Form 990. For example, Schedule A is used by tax exempt organizations for filing Form 990-EZ or 990, to provide information about its public charity status and public support. Most of the tax-exempt organizations will file Schedule B (Schedule of Contributors) which list the contributions received in the given tax year.

Sometimes certain tax-exempt organizations will file Schedule C which reports the political activities of the tax-exempt organization. There are other documents like Schedule D which provides the detailed financial statement of the tax-exempt firm. Certain tax-exempt firms will file Schedule F for reporting the level of activity of the organization outside US and Schedule G to provide information about the fundraising activities of the organization.

Likewise IRS requires additional information which needs to be filed through other schedules.

If I Want to See the Tax Form 990 of a Particular Nonprofit, How Can I View It?

Commonly, you can get the Form 990 of the nonprofits from the IRS, however, you can even view it at the charity in which you are interested in. It is compulsory for nonprofits to make their 990 and their exemption applications available online for public inspection for free at the district and regional offices in the regular business hours.

Nowadays, various nonprofits make their 990 Forms available on their website and some even upload them to the Guidestar website and even search for it at the ProPublica, which is a website for investigative journalism.