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Non-Profit Filing for Schools

Which 990 Form Should Schools File?

Schools need to file Form 990-N, Form 990-EZ depending on their gross receipts. An organization that answered “Yes” to Form 990, Part IV, line 13, or Form 990-EZ, Part VI, line 48, must complete and attach Schedule E (Form 990-EZ or 990), as applicable. This Schedule is for reporting policies, facilities, and benefits of the school and for explaining in detail any necessary information.

How does section 170(B)(1)(a)(Ii) apply to schools?

To qualify for tax exemption under IRC 170(b)(1)(A)(ii), a school must primarily present formal instruction, maintain a regular faculty, curriculum, and facility, and have a regularly enrolled body of students.

Notice of Nondiscriminatory Policy

According to the IRS, schools that are IRC 170(b)(1)(A)(ii) organizations must have racially nondiscriminatory policies for students to qualify under IRC 501(c)(3). Rev. Proc. 75–50, 1975–2 C.B. 587, sets forth guidelines and recordkeeping requirements in this regard.

Public About Equality

As per the IRS, the school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. To satisfy this requirement, the school can publish a notice of its policy within both printed and broadcast media that serves all racial segments of the community. If a school is aduited, they must be prepared to demonstrate that their racially nondiscriminatory policy is in accordance with IRS standards.

What Are Considerations for Scholarship and Loan Programs?

According to Reg. 1.170A–9(b)(2)(i), "expenditures to or for the benefit of a college or university" include expenses for any one or more of the normal functions of colleges and universities. These can include the acquisition and maintenance of campus area property, the construction of college or university buildings, the acquisition of equipment and furnishings used for normal functions of colleges, or the expenditures of scholarships, libraries, and student loans.

What Records and Exceptions Are There?

According to the IRS, exempt private schools must maintain certain records for at least three years, beginning with the year after the year of acquisition.

  • Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year.
  • Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis.
  • Copies of all brochures, catalogues, and advertising dealing with student admissions, programs, and scholarships. Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in which publications their advertisements were placed./li>
  • Copies of all materials used by or on behalf of the school to solicit contributions.

Of course, there are a few exceptions.

  • The same substantial information that each of these records would provide has been included in reports filed in accordance with the law and is current.
  • The school maintains copies of these reports from which this information is readily obtainable.

Choose Your Gross Receipt and Start Filing with ExpressTaxExempt

Conditions Forms to File Action
Gross receipts normally ≤ $50,000 Form 990-N Start Filing Now
Gross receipts < $200,000, and Total assets < $500,000 Form 990-EZ Start Filing Now
Gross receipts ≥ $200,000, or Total assets ≥ $500,000 Form 990 Start Filing Now

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Frequently Asked Questions

Find answers related to e-filing IRS Form 990, 990-EZ, 990-N (e-Postcard) and Extension Form 8868 with our Frequently Asked Questions.

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