About Form 990
Who is Required to File Form 990?
Form 990 is generally filed by organizations exempt from income tax under IRS Code section 501(a). Other filers of the 990 Forms include certain tax-exempt organizations described in section 501(c)(3) as well as any other 501(c) subsections. The traditional 990 Long Form, commonly referred to as Form 990, is filed by qualifying organization that receive more than $200,000 in gross receipts during the tax year. Organizations are also required to file Form 990 if they have at least $500,000 in total assets, regardless of total gross receipts.
Form 990 Filing Requirements
In order for a tax-exempt organization's return to be considered complete, it must complete Parts I through XII, Schedule O, and any schedules associated with a "Yes" response in the questions in Part IV on Form 990. The completed Form 990 must also be available for public inspection, although there are certain exceptions for Schedule B, the Schedule of Contributors, which is required to be submitted by certain organizations. The organization's records must also be kept for as long as needed, or at least three years, as advised by the IRS.
Form 990 Schedules & Attachments
Along with Form 990, certain organizations will be required to provide additional information on the Form 990 schedules and attachments. There are 16 schedules total that elaborate on the information found on Form 990. Generally, Schedules A (Public Charity Status and Public Support) and O (Supplemental Information to Form 990) are the most common schedules filed with Form 990.
Which Organizations Are Not Required to File Form 990?
While Form 990 is used by tax-exempt organizations, there are certain groups that qualify as tax-exempt but aren't required to submit the form. This includes certain religious organizations, including churches, K-12 schools affiliated with a church or operated by a religious order, any exclusively religious activity of any regligious order, among others. Certain governmental and political organizations aren't required to file Form 990 either, including state institutions whose income is excluded from gross income, units or affiliates described in Rev. Proc. 95-48, 1995-2 C.B. 418. Check with the IRS for more information on filing requirements for these types of organizations.
Form 990 Accounting Periods & Methods
To comply with the IRS's rules, tax-exempt organizations must operate on one of the following accounting periods: calendar year, fiscal year, or short period. Calendar year periods run from January 1 to December 31 and fiscal year periods run for 12 months starting any other month. Short accounting periods are those that are fewer than 12 months long, usually occurring when the organization first commences operations, changes its accounting period, or terminates. Unless otherwise instructed, organizations should use the same accounting method to report revenue and expenses as the one they use to keep their own books and records.
Form 990 Group Returns
Central or parent organizations are able to file a group return with Form 990 for two or more subordinate or local organizations. The other organizations in the group must either be affiliated with the parent organization during their tax year end date or be under the control of the parent organization. When filing a group return, the parent organization must use the 990 Long Form. Additionally, subordinate organizations may choose to file their own return but cannot act as the parent organization to file a group return. Some parent organizations may be required to file a separate 990 Form in addition to the group return.
Form 990 Deadline
The Form 990 deadline varies from because it is due by the fifteenth day of the fifth month following the organization's tax year end date. For calendar year tax filers (those whose tax year is January 1 to December 31), this deadline is May 15.
Extension of Time to File Form 990
An organization can request additional time to file any of Form 990 by submitting Form 8868 by their original deadline. Upon approval, this extension form grants the organization an additional six months to file Form 990.
Form 990 Amended Returns
If a Form 990 filer notices an error in their original filing, an amended Form 990 can be filed once the IRS has processed the original return. The amended return must include all of the information required, as well as any schedules, and the "Amended return" box in Item B must be checked. Use Schedule O ot describe the changes made to your amended return.
Penalties for Failing to File Form 990
If an organization fails to file Form 990 or files their return late, they may incur penalties from the IRS. According to section 6652(c)(1)(A), this penalty is $20 for every day the return is late. However, the penalty cannot exceed 5% of the organization's gross receipts or $10,000, whichever is less. If the organization's annual receipts exceed $1,020,000, the per diem penalty increases to $100, with a maximum penalty of $51,000 per return. Organizations that are required to electronically file but file on paper instead - or that file an incomplete Form 990 - are considered to have failed to file their return.