If You Have a Non-Profit Organization, What Should You Know About Form 990?

form 990

Even though as a non-profit organization your company is not required to pay federal taxes, you are still required to file information with the IRS. This form is known as 990. By filing a 990 with the IRS, the agency will know that you are operating your non-profit in a way that is consistent with the public responsibility your business has.

Understanding the 990

A simple online 990 lookup will give you more information about the form. It is a document that non-exempt organizations file with the IRS each year. Charitable non-profits must also file the form.

This form allows the public and the IRS to evaluate all non-profits so it is public knowledge how they operate. The form collects from non-profits like:

  • The mission
  • The programs
  • The finances

In the past few years, the 990 form has been revised in order to collect more information from non-profits. Some of the additional information required possible conflicts of interest, the compensation of board members and employees, and other financial issues as well as the avoidance of fraud within the organization.

Do All Non-Profits Have to File a 990?

All non-profit and private foundations must file the 990 regardless of their income. They will file 990-PF. Larger organizations that have gross receipts that total $50,000 or more must file either a 990 or the 990-EZ.

Smaller non-profits that have receipts that total less than $50,000 gross must file the 990-N if they want to keep their tax-exempt status. Any organizations that fall under tax-exempt status must file a 990:

  • 501 c
  • 527
  • 4947 a1

The only exceptions are organizations that do not fall under the following exemptions.

The Organizations That Are Exempt from Filing a 990 Form

There are certain types of organizations that may have a tax-exempt based on the US tax code, but they do not have to file a 990 form. Most faith based organizations like churches, religious schools and missionary organizations are exempt from filing a 990. This is based on the classification of the church as described in the Tax Guide for Churches and Religious Organizations.

A subsidiary of a non-profit does not have to file a 990 if the parent organization is filing a group return.

If a non-profit is in the Internal Revenue system, it does not have to file a 990. This means that if your non-profit is incorporated or unincorporated in the state your business is, but you are not planning to file for tax-exempt status, you do not have to file the form.

Many state and federal institutions do not have to file a 990 if they provide an essential service. A college or university is an example of a non-profit that falls under this category.

Most non-profits now publicly display their 990 on their website. There are also websites online that will let you search for a non-profit’s 990 form. Be sure you do not forget to file your 990 if its required. Your organization will lose its tax-exempt status and you will not be able to appeal the decision.