What is a Form 990 and do we need one?

This article was originally posted on November 2020 at jcobbconsulting.com

What is a Form 990 and Do We Need One?

A Form 990 is the annual reporting form that needs to be completed by tax-exempt, 501c3 organizations. Much like personal tax forms, which version of the from you use depends on the income level and complexity of your organization’s revenue streams.

If you do not file this return for three consecutive years, you risk having your 501c3 tax exempt status revoked. A fee may be assessed if you wish to re-establish your exempt status after revocation. Remember, if you are operating prior to receiving your exempt status, a Form 990 return may still be required. While certain organizations are not required to file Form 990, including: certain religious organizations, governmental organizations, and political organizations, check with your legal advisor.

This guide is meant to provide the basic information you need to understand regarding filing obligations, it is not legal advice. Be sure to consult your legal advisor for all IRS, tax-exempt, tax, or fiscal obligations.

What’s the difference between Form 990-N, EZ, and 990?

The simplest form – the Form 990N is an Electronic Notice e-postcard to be completed by tax exempt organizations with gross receipts normally below $50,000. While an organization of this size may opt to file the more complex Form 990-EZ or Form 990, this is not required. Simply complete a one-time registration at IRS.gov, review the User Guide, and you will be ready to submit the form annually, as required.

If your organization has a fiscal sponsor or is an auxiliary group within an organization like a church, you may not be required to submit your own Form 990, but it is important to check with your legal advisor to fully understand your legal obligations.

If your organization takes in between $50,000 and $200,000 and has total assets of less than $500,000, you must file Form 990-EZ. You may also opt to complete Form 990.

If your organization’s gross receipts exceed $200,000 or total assets exceed $500,000, you must file Form 990.

If you run a private foundation, you must file Form 990-PF.

When is the return due?

The Form 990 is due every year by the 15th day of the 5th month after the close of your tax year. So, for example, if your tax year ends with the calendar year on December 31, you must file by May 15 of the following year. For a handy list of due dates by month, visit the IRS website.

If you do not file this return for three consecutive years, you risk having your 501c3 tax exempt status revoked. Remember to always check with your legal advisor regarding legal matters.