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Things You Need to Know About Form 990

From Joanne Fritz,
Your Guide to Nonprofit Charitable Orgs.
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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 what nonprofit organizations file each year with the IRS. There are three versions of this "informational" form: 990, 990-EZ, and 990-PF.

The 990 allows the IRS and the public to evaluate nonprofits and how they operate. Since nonprofits are not required to file annual reports or even to have financial audits by independent accountants, the 990 is a critical disclosure.

Nonprofits that file the 990 do not pay federal taxes on income that is related to their missions. Many private foundations, however, do pay an exise tax that is based on investment income.

Who has to file a 990?

  • Private foundations. They file a Form 990-PF.
  • Larger nonprofits that have incomes of more than $25,000 have to file Form 990 or 990-EZ.
  • 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?

  • Small nonprofits with annual incomes of $25,000 or less. However, as a result of the Pension Protection Act of 2006 most organizations with gross receipts of $25,000 or less will soon have to file the new form electronic 990-N (e-Postcard) in order to maintain their exempt status.
  • Faith-based organizations.
  • Subsidiaries of other nonprofits.
  • Nonprofits not in the system yet. If you are a nonprofit in your state but haven't applied to the IRS for exemption from federal income tax, you don't have to file a Form 990.
  • Religious schools.
  • Missions or missionary organizations.
  • 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, 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 and Form 990-EZ are filed by tax-exempt organizations, nonexempt charitable trusts, and some types of exempt political organizations. If your organization has gross receipts of less than $100,000 and total assets of less than $250,000 at the end of your fiscal year, you can file a 990-EZ, which is the short form. Otherwise, file the 990.

The 990-PF is for all private foundations, regardless of whether they have any assets or annual receipts.

If I want to see the 990 of a particular nonprofit, how do I do it?

You can get Form 990 right from the nonprofit 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. A nonprofit without a formal office can make the documents available at a "reasonable" location within a "reasonable" amount of time after receiving a request.

Many nonprofits now make 990s available for viewing on their websites. You can also view them at www.guidestar.org. A free search at GuideStar will get you basic information but you can purchase other levels of service that allow you to see more sophisticated reports and to compare data among nonprofits.

Suggested Reading

Form 990/Form 990-PF
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