what is a form 990

It is sufficient to enter “family relationship” or “business relationship” without greater detail. The 5% test is applied on a partnership-by-partnership basis, although direct ownership by the organization and indirect ownership through disregarded entities or tiered entities treated as partnerships are aggregated for this purpose. The organization need not report on Schedule R (Form 990), Part VI, either (1) the conduct of activities through an organization treated as a taxable or tax-exempt corporation for federal income tax purposes, or (2) unrelated partnerships that meet both of the following conditions. Most nonprofit organizations with IRS tax-exempt status and gross receipts of $200,000 or more or assets of $500,000 or more at the end of the year must file an IRS 990 form annually with the IRS. This form details the money the organization raised through fundraising, grants, and services, how much they paid out to employees, and the assets the organization purchased, sold, or maintained. However, the IRS isn’t the only party that may be interested in these returns.

  • Report amounts in U.S. dollars and state what conversion rate the organization uses.
  • Other compensation includes compensation other than reportable compensation, including deferred compensation not currently reportable in box 1 or 5 of Form W-2, box 1 of Form 1099-NEC, or box 6 of Form 1099-MISC, and certain nontaxable benefits, as discussed in detail in the instructions for Schedule J (Form 990), Part II.
  • The relationship of a Type I supporting organization with its supported organization(s) is comparable to that of a parent-subsidiary relationship.
  • All activities intended to influence foreign, national, state, or local legislation.
  • E’s written acknowledgment satisfies the substantiation requirement if it describes the poster, gives a good faith estimate of its FMV ($20), and disregards the remaining membership benefits.

The proposed regulations had special provisions covering “any transaction in which the amount of any economic benefit provided to or for the use of a disqualified person is determined in whole or in part by the revenues of one or more activities of the organization” — so-called revenue-sharing transactions. Rather than setting forth additional rules on revenue-sharing transactions, the final regulations reserve this section. Consequently, until the IRS issues new regulations for this reserved section on revenue-sharing transactions, these transactions will be evaluated under the general rules (for example, the FMV standards) that apply to all contractual arrangements between applicable Encumbrance: Definition, Example, and Types of Encumbrances tax-exempt organizations and their disqualified persons. An excise tax equal to 10% of the excess benefit can be imposed on the participation of an organization manager in an excess benefit transaction between an applicable tax-exempt organization and a disqualified person. This tax, which can’t exceed $20,000 for any single transaction, is only imposed if the 25% tax is imposed on the disqualified person, the organization manager knowingly participated in the transaction, and the manager’s participation was willful and not due to reasonable cause. An organization manager can be liable for both the tax on disqualified persons and on organization managers in appropriate circumstances.

What‘s Important about Form 990?

Note that a significant disposition of net assets may result from either an expansion or contraction of operations. Organizations that answer “Yes” on either of these questions must also check the box in Part I, line 2, and complete Schedule N (Form 990), Part I or Part II. Answer “Yes” and complete Schedule K (Form 990) for each tax-exempt bond issued by or for the benefit of the organization after December 31, 2002 (including refunding bonds) with an outstanding principal amount of more than $100,000 as of the last day of the organization’s tax year. For this purpose, bonds that have been legally defeased, and as a result are no longer treated as a liability of the organization, aren’t considered outstanding. Answer “Yes” if the organization reported on Part IX, line 3, column (A), more than $5,000 of aggregate grants and other assistance to foreign individuals, or to domestic organizations or domestic individuals for the purpose of providing grants or other assistance to a designated foreign individual or individuals.

what is a form 990

In that case, the amount required to be reported in box 1 of Form W-2 must be reported as reportable compensation. Report compensation paid or accrued by the filing organization and related organizations. Special rules apply for reporting reportable compensation and other compensation. For purposes of Form 990, a current key employee is an employee of the organization (other than an officer, director, or trustee) who meets all three of the following tests, applied in the following order. Some states require or permit the filing of Form 990 to fulfill state exempt organization or charitable solicitation reporting requirements.

Quiz: Advisory Progress Report

An individual that isn’t an employee of the organization (or of a disregarded entity of the organization) is nonetheless treated as a key employee if she or he serves as an officer or director of a disregarded entity of the organization and otherwise meets the standards of a key employee set forth above. See Disregarded Entities, later, for treatment of certain employees of a disregarded entity as key Balance Sheet: Explanation, Components, and Examples employees of the organization. A director or trustee is a member of the organization’s governing body, but only if the member has voting rights. A director or trustee that served at any time during the organization’s tax year is deemed a current director or trustee. Members of advisory boards that don’t exercise any governance authority over the organization aren’t considered directors or trustees.

what is a form 990

Don’t report on line 11 publicly traded stock for which the organization holds 5% or more of the outstanding shares of the same class or publicly traded stock in a corporation that comprises more than 5% of the organization’s total assets. Enter amounts for supplies (office, classroom, or other supplies); telephone (cell phones and landlines) and facsimile; postage (overnight delivery, parcel delivery, trucking, and other delivery expenses) and mailing expenses; shipping materials; equipment rental; bank fees; and other similar costs. Printing costs that relate to conferences or conventions must be reported on line 19. Enter the total fees charged for management services provided by outside firms and individuals. The organization must enter the total amount of grants and other assistance made to foreign organizations, foreign governments, and foreign individuals, and to domestic organizations or domestic individuals for the purpose of providing grants or other assistance to designated foreign organizations or foreign individuals. Use line 2 to report amounts paid by the trust to or for the benefit of miners or their beneficiaries.

How do I file a 990?

A section 501(c)(9) voluntary employees’ beneficiary association must use its own EIN and not the EIN of its sponsor. If the organization operates under a name different from its legal name, enter the alternate name on the “Doing Business As” (DBA) line. If multiple DBA names won’t fit on the line, enter one on the line and enter the others on Schedule O (Form 990). Use Form 8868, Application for Automatic Extension of Time To File an Exempt Organization Return, to request an automatic extension of time to file. For the latest information about developments related to Form 990 and its instructions, such as legislation enacted after they were published, go to

  • Such activities include direct lobbying (attempting to influence the legislators) and grassroots lobbying (attempting to influence legislation by influencing the general public).
  • Include fees paid to independent contractors for advertising, except for fees paid to independent contractors for conducting professional fundraising services or campaigns, which are reported on line 11e.
  • Candid’s Online Librarian service will answer your questions within two business days.
  • A reasonable amount of effort in information gathering that the organization is expected to undertake in order to provide information requested on Form 990.
  • Excessive lobbying can lead to the imposition of penalties—on the organization and board members—and possible revocation of exempt status.

Report on lines 5–10, as appropriate, payments that reimburse third parties for compensation to the organization’s officers, directors, trustees, key employees, or other employees. Report payments to contractors for information technology services on line 14, rather than on line 11g. If the organization makes reasonable efforts but is unable to obtain the information or provide a reasonable estimate of compensation from a related organization in column (E) or (F), then it must report the efforts undertaken on Schedule O (Form 990). Report such compensation from unrelated organizations in Section A, columns (D) and (F), as appropriate. If the organization can’t distinguish between reportable compensation and other compensation from the unrelated organization, report all such compensation in column (D).

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