Tax Filing: Understanding the 990 Types

Nonprofits don't pay income tax the way businesses do. But most still file an annual return with the IRS, called the Form 990. It tells the IRS (and the public) what you took in, what you spent and how you're run.

The good news: there isn't just one 990. The form you file depends on your size, and for small organizations it can be very simple.

Which 990 do you file?

It mainly comes down to two numbers: your gross receipts (everything you took in during the year, before subtracting any expenses) and your total assets at year-end.

Form 990-N (the "e-Postcard") For organizations whose gross receipts are normally $50,000 or less. It's a short online form: basic details like your name, address, EIN and a principal officer, and a confirmation that you're under the limit. No financial statements.

Form 990-EZ For organizations with gross receipts under $200,000 and total assets under $500,000. It's a shorter version of the full return, with your revenue, expenses, balance sheet and a summary of your programs.

Form 990 For organizations with gross receipts of $200,000 or more, or total assets of $500,000 or more. This is the full return, with detailed sections on your programs, governance, compensation and expenses.

Form 990-PF Private foundations file the 990-PF no matter how big or small they are. If you're a public charity, this one isn't for you.

A smaller organization can always choose to file a longer form. Sometimes funders or your state prefer it.

A note on "normally." For the 990-N, the IRS looks at more than one year. A newer organization uses a different test (for example, in its first year, $75,000 or less received or pledged). If you're close to a limit, check before you file.

When is it due?

All of the 990 forms are due on the 15th day of the 5th month after your fiscal year ends.

• Year ends December 31 → due May 15
• Year ends June 30 → due November 15

If the date lands on a weekend or holiday, it moves to the next business day.

Need more time?

For the 990, 990-EZ and 990-PF, file Form 8868 by the original due date to get an automatic extension of up to 6 months.

The 990-N can't be extended. The upside: it's quick.

Don't skip a year (or three)

This is the one rule I'd love every nonprofit leader to know.

If you don't file a required 990 for three years in a row, the IRS automatically revokes your tax-exempt status. It doesn't send a warning first. It simply takes effect on the due date of the third missed return.

Getting it back means reapplying, which takes time and money. Filing even the simple e-Postcard each year keeps you safe.

Where payroll fits in

Payroll taxes are separate from your 990. They're filed through your payroll returns, like the quarterly Form 941 and the year-end W-2s and W-3. But the full 990 asks about them, so they need to line up.

A few spots where payroll shows up:

• Employee count. The 990 asks how many employees you reported on your Form W-3 for the year.
• Payroll returns. It asks whether you filed all required employment tax returns, such as Forms 941 and 940.
• Contractor forms. It asks how many information returns, like 1099s, you filed.
• Officer pay. The 990 lists your officers, directors and key employees, along with what they were paid.

A tip that saves headaches: before your 990 is prepared, check that your four 941s add up to your W-3, and that both match the wages in your books. When those agree, the 990 goes smoothly.

Don't forget your state

Your federal 990 isn't the end of it. Many states have their own annual filing, and rules vary.

• New York: most charities register with the Attorney General's Charities Bureau and file the annual CHAR500.
• California: registered charities file the annual RRF-1 with the Attorney General's Registry of Charitable Trusts.
• Florida: charities that ask the public for donations register with, and renew each year at, the Florida Department of Agriculture and Consumer Services.

Your state's rules may also depend on how much you raise, so check them each year.

The takeaway

Know your form, mark your due date and file every single year. That's most of the battle.

Not sure which form is yours, or behind on a filing? We can sort it out together.