Even though tax-exempt nonprofits do not pay federal taxes, they do have to file an information form with the IRS.
What is a 990?
IRS Form 990 is the tax document that tax-exempt nonprofit organizations file each year with the IRS. The 990 allows the IRS and the public to evaluate nonprofits and how they operate.
Beginning with tax returns filed in 2009 for 2008, nonprofits must file the new Form 990 that requires more disclosure of potential conflicts of interest, compensation of board members and staff, and other details having to do with financial accountability and avoidance of fraud. The IRS provides some useful information about the 990:
Who has to file a 990?
- Private foundations. They file a Form 990-PF.
- Larger nonprofits that have gross receipts of more than $50 ,000 (as of Jan 2010) have to file Form 990 or 990-EZ.
- Small nonprofits with gross receipts of $50,000 (as of Jan 2010) or less must file the new form electronic 990-N (e-Postcard) in order to maintain their exempt status.
- Organizations that are tax-exempt under Sections 501(c), 527, or 4947(a)(1) of the U.S. tax code, and that don't fall into the exemptions listed below.
What organizations are exempt from filing any Form 990?
- Churches. The criteria for being classified as a church are listed in the Tax Guide for Churches and Religious Organizations (IRS Publication 1828).
- Subsidiaries of other nonprofits.
- Nonprofits not in the system yet. If you are an incorporated nonprofit in your state but don't plan to apply to the IRS for exemption from federal income tax, you don't have to file a Form 990. However, if your organization claims to be tax-exempt and intends to file with the IRS by the end of the 27th month, you must file Form 990 (or 990-EZ or 990-N as appropriate) during the 27 month period, even though no application has been submitted to the IRS nor any determination yet received.
- Religious schools.
- State institutions. Some state institutions are exempt because they provide essential services (a university is an example).
- Government corporations.
When do we file the 990?You must file your 990, 990-EZ, 990-N, or 990-PF by the 15th day of the 5th month after your accounting period ends. So, if your fiscal year ends on December 31, the 990 is due on May 15 of the following year.
Which form of the 990 do we file?Forms 990, 990-EZ and 990-N are filed by tax-exempt organizations, nonexempt charitable trusts, and some types of exempt political organizations. New rules are being phased in, so consult this IRS threshold chart to find out which form to file.
The 990-PF is filed by all private foundations.
If I want to see the 990 of a particular nonprofit, how do I do it?You can get a copy of a nonprofit's Form 990 from the IRS, but you can also view it at the charity you are interested in. Nonprofit organizations are required to make their 990 and their exemption application available for public inspection without charge at their regional and district offices during regular business hours.
Many nonprofits now make 990s available for viewing on their websites. You can also view them at Guidestar, an organization that compiles information about nonprofits.