IRS Form 990-T, Exempt Organization Business Income Tax Return - An Overview

- Updated June 12, 2021 - 8.00 AM - Admin, ExpressTaxExempt

Form 990-T is used by Exempt Organizations to report unrelated business income tax.

Exempt organizations must make Form 990-T and its related schedules available for public inspection for a period of 3 years from the date the form was filed, including any extensions.

The following topics cover everything you need to know about Form 990-T, its deadline, and other
related information.

1. What is IRS Form 990-T?

Form 990-T, Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e)), is an information return used by exempt organizations to report unrelated business income
and tax liabilities.

Form 990-T is also used for the following purposes:

  • To claim a refund on an income tax paid by a regulated investment company (RIC) or a real estate investment trust (REIT) on an undistributed long-term capital gain.
  • To report proxy tax liability.
  • To request credits for certain federal excise taxes paid or for small employer health insurance premiums paid.
  • To report unrelated business income tax on reinsurance entities.

2. Who must file Form 990-T?

Exempt organizations that file Form 990, 990-EZ, or 990-PF and have a gross income of $1,000 or more from unrelated businesses for the tax year must file Form 990-T.

3. When is the deadline to file Form 990-T?

Employees' trusts, defined in section 401(a), IRAs (including SEPs and SIMPLEs), Roth IRAs, Coverdell ESAs, or 408(a) (Archer MSAs) must file Form 990-T by the 15th day of the 4th month after the end of their tax year.

Other organizations must file Form 990-T by the 15th day of the 5th month after the end of
their tax year.

Note: If the due date falls on a Saturday, Sunday, or legal holiday, file the form on the
next business day.

4. How to file Form 990-T?

What’s New: The Taxpayer First Act of 2019 (Pub. L. 116-25) mandated electronic filing for Form 990-T. Starting in February 2021, Form 990-T must be e-filed.

The IRS will accept completed 2020 Forms 990-T in paper format that were postmarked on or before March 15, 2021.

To file 990-T electronically, you can get started with the IRS authorized e-file providers like ExpressTaxExempt.com. By E-filing, you get to know the status of your submitted forms instantly. Choose an Electronic filing method for quick, secure, and more accurate filing.

5. What information is needed to file Form 990-T?

The following information is required to file Form 990-T:

  • The organization's name, EIN, address, and phone number
  • Relevant details about any address changes, name changes, or filing an amended return
  • Group exemption number
  • Organization's tax-exempt status
  • If you are only filing Form 990-T to claim a credit from Form 8941 and/or to claim a refund shown on Form 2439, provide relevant details
  • Form of Organization
  • The fair market value of all assets at the end of the year
  • Schedule A details attached with Form 990-T

6. Additional Information Required to File IRS form 990-T

Depending on the information you report on Form 990-T, you may be required to provide
additional information.

If your organization engages in more than one unrelated trade or business, there are some extra filing requirements. You will need to complete and attach a separate Schedule A to report income and allowable deduction for each separate unrelated trade or business.

Also, you need to attach the supporting Forms while filing Form 990-T and Schedule A. It depends on the information you provided on Form 990-T.

7. How to file an extension for Form 990-T?

If your organization needs additional time to file Form 990-T, you can request an automatic extension of time using Form 8868, Application for Automatic Extension of Time To File an
Exempt Organization Return.

Note: Even if your organization requests an extension with Form 8868, you will still need to pay any taxes due in full by the return’s original due date.

8. What are the late filing penalties for Form 990-T?

An organization that fails to file its return on or before the due date (including an extension of time for filing) will be subjected to a penalty of 5% of the unpaid tax for each month, or part of a month, that the return is late. The maximum penalty is 25% of the unpaid tax. The minimum penalty for a return that is more than 60 days late is the smaller of the taxes due, or $435.

The penalty for paying taxes late is usually 1/2 of 1% of the unpaid taxes for each month or part of a month the tax is unpaid. This penalty can’t exceed 25% of the unpaid tax.

The IRS won’t impose a penalty if the filing organization provides a reasonable explanation for filing late.

9. Where to mail Form 990-T?

The IRS has mandated electronic filing for Form 990-T, but there are a few instances where paper
filing is permitted.

If that’s the case, send your Form 990-T and all the required information to this mailing address:

Mailing Address
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027

10. Why choose ExpressTaxExempt to file Form 990-T electronically?

ExpressTaxExempt is an IRS authorized e-file provider and a preferred option for thousands of Exempt organizations. This filing service allows organizations to e-file Form 990-T securely and accurately!

Here’s a list of features that ExpressTaxExempt provides:

  • E-file your form using our direct form-based entry preparation service
  • File Form 990-T with Schedule A
  • Fix errors easily with internal audit checks
  • Invite your organization’s board members to review and approve returns
  • Get discounted pricing for Tax Professionals
  • Re-transmit rejected returns for free
  • E-file your amended return easily
  • Contact our excellent customer support by phone, email, or live chat
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