What is a 990 Form?: A Nonprofit’s Guide

what is a form 990

For purposes of this return, report all rental income from an affiliated organization on line 2. Membership dues can consist of both contributions and payment for goods and services. In that case, the portion of the membership dues that is a payment for goods or services should be reported on line 2, Program Service Revenue.

For example, if an officer of the organization received compensation of $6,000, $15,000, and $50,000 from three separate related organizations for services provided to those organizations, the organization needs to report only $65,000 in column (E) for the officer. A tax-exempt organization must file an annual information return or notice with the IRS, unless an exception applies. Annual information returns include Form 990, Form 990-EZ and Form 990-PF.

Who Should File IRS Form 990?

See the special rules below regarding section 501(c)(21) black lung trusts, controlling organizations under section 512(b)(13), and sponsoring organizations of donor advised funds. Organizations that file Form 990 or Form 990-EZ use this schedule to provide information on certain financial transactions or arrangements between the organization and disqualified persons under section 4958 or other interested persons. This schedule is also used to determine whether a member of the organization’s governing body is an independent member. The organizations which obtained tax-exempt status from the IRS are required to file tax returns annually with the IRS. 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. Schedule F provides information about foreign activities including fundraising, program services, investments and grants to foreign organizations and individuals.

what is a form 990

If the management company wasn’t a related organization during the tax year, the individual’s compensation from the management company isn’t reportable in Part VII, Section A. Questions pertaining to management companies also appear on Form 990, Part VI, line 3, and Schedule H (Form 990), Part IV. Enter the net amount of all notes receivable and loans receivable not listed on lines 5 and 6, including receivables from unrelated third parties. The term “unrelated third parties” includes independent contractors providing goods or services and employees who aren’t current or former officers, directors, trustees, key employees, highest compensated employees, or disqualified persons. Enter the employer’s share of contributions to, or accruals under, qualified and nonqualified pension and deferred compensation plans for the year. The organization should include contributions made by the filing organization, common paymasters, and payroll/reporting agents to the filing organization’s sections 401(k) and 403(b) pension plans on behalf of employees.


You will also have to identify which parts of the form have been amended (using Schedule O.) However, you cannot file an amended return until the IRS accepts your original return, so you’ll have to wait to complete the process if, for example, you realize after the fact that you’ve sent in an incorrect return. However, make sure to enter the right information, as incorrect filings can result in your application being rejected. And again, if you fail to correct this information within the IRS’s given time frame, you can even incur penalties. A Form 1040 return with limited credits is one that’s filed using IRS Form 1040 only (with the exception of the specific covered situations described below). Roughly 37% of taxpayers are eligible.If you have a Form 1040 return and are claiming limited credits only, you can file for free yourself with TurboTax Free Edition or TurboTax Live Assisted Basic (if available), or you can file with TurboTax Full Service at the listed price. Filing a 990 form each tax year for nonprofits is an important task from an operational standpoint.

what is a form 990

Don’t include any penalties, fines, settlements, or judgments imposed against the organization as a result of legal proceedings. Report any amounts for lobbying services provided by attorneys on line 11d. Don’t use this column to report costs of special meetings or other activities that relate to fundraising or specific program services. Income from bingo games isn’t generally subject to the tax on unrelated business income if the games meet the legal definition of bingo. For a game to meet the legal definition of bingo, wagers must be placed, winners must be determined, and prizes or other property must be distributed in the presence of all persons placing wagers in that game. Enter the gross amount of interest income from savings and temporary cash investments, dividend and interest income from equity and debt securities (stocks and bonds), and amounts received from payments on securities loans, as defined in section 512(a)(5), as well as interest from notes and loans receivable.

Do You Need to File Form 990 Each Year?

Other documents include a Schedule D to provide more detailed financial statements, a Schedule F to report the organization’s level of activity outside the United States and a Schedule G to describe the organization’s fundraising activities. This page provides resources and tools for tax-exempt organizations relating to annual filing requirements and 990-series forms. In June 2007, the IRS released a revised Form 990 that requires significant disclosures on corporate governance and boards of directors. These new disclosures are required for all filers for the 2009 tax year, with more significant reporting requirements for organizations with either revenues exceeding $1 million or assets exceeding $2.5 million.

  • A public charity described in section 170(b)(1)(A)(iv), 170(b)(1)(A)(vi), or 509(a)(2) that isn’t within its initial 5 years of existence should first complete Part II or III of Schedule A (Form 990) to ensure that it continues to qualify as a public charity for the tax year.
  • Enter the combined total of amounts held in interest-bearing checking and savings accounts, deposits in transit, temporary cash investments (such as money market funds, commercial paper, and certificates of deposit), and U.S.
  • Generally, tax returns and return information are confidential, as required by section 6103.
  • If gaming is conducted at a fundraising event, the income and expenses must be allocated between the gaming and the fundraising event on Form 990, Part VIII; report all income from gaming on line 9a.
  • For each person listed in column (A), list below the dotted line an estimate of the average hours per week (if any) devoted to related organizations.

An organization that over-compensates its management may jeopardize its tax-exempt status with the IRS. Most tax-exempt organizations that have gross receipts of at least $200,000 or assets worth at least $500,000 must file Form 990 on an annual basis. Some organizations, such as political organizations, churches and other religious organizations, are exempt from filing an annual Form 990.

How to file your nonprofit organization’s tax return

This amount includes contributions from donor advised funds (unless the sponsoring organization is a related organization) and from gaming activities. For a section 501(c)(21) trust, enter the total contributions received under section 192 from the coal mine operator who established the trust. In addition to compensation paid by the organization to A, A receives payments from B, an unrelated corporation (using the definition of relatedness on Schedule R (Form 990)), for services provided by A to the organization. The organization is aware of the compensation arrangement between A and B, and doesn’t treat the payments as paid by the organization for Form W-2 reporting purposes. A, as the top management official of the organization, must be listed as an officer of the organization in Part VII, Section A. However, the amounts paid by B to A require that the organization answer “Yes” on line 5 and complete Schedule J (Form 990) about A.

  • To help determine reasonable compensation, an organization might also hire an independent compensation consultant.
  • 4302, A Charity’s Guide to Vehicle Donation; and the Instructions for Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes.Substantiation and disclosure requirements for charitable contributions.
  • In such a case, indicate the individual’s former position in his or her title (for example, “former president”).
  • Enter contributions by the filing organization, common paymasters, and payroll/reporting agents to the filing organization’s employee benefit programs (such as insurance, health, and welfare programs that aren’t an incidental part of a pension plan included on line 8), and the cost of other employee benefits.
  • Make an entry (including -0- when appropriate) on all lines requiring an amount or other information to be reported.
  • Form 990 is used by the IRS to gather information about an organization’s mission, programs, and finances.