Since 2011 the IRS has revoked the tax-exempt status of over 500,000 nonprofit groups. Make sure your organization keeps its status as a tax-exempt organization by filing the appropriate returns with the IRS.
Most nonprofit organizations are required to file annual reporting returns with the IRS. Even though tax-exempt nonprofit organizations do not pay federal taxes (that is what “tax-exempt” means), most do have to file an informational return with the IRS. This annual reporting return is called a Form 990.
What is the IRS Form 990?
The IRS Form 990 is the reporting form that many federally tax-exempt organizations must file with the IRS each year. This form allows the IRS and the general public to evaluate a nonprofit’s operations; it includes information on the nonprofit’s mission, programs, and finances.
The type of Form 990 to be filed by an organization depends on the filing year and the gross receipts of the organization. The different forms include Forms 990, 990-EZ and 990-N.
The IRS has a helpful chart available that can guide you in determining which form to file.
What nonprofits are exempt from filing IRS Form 990s?
Not all nonprofits have to file annual returns. Generally, the following do not have to file Form 990:
- Most faith-based organizations, religious schools, missions or missionary organizations
- Subsidiaries of other nonprofits – those that may be covered under a group return filed by the parent organization
- Many government corporations
- State institutions that provide essential services
- Nonprofits that have not received tax-exempt status from the IRS. These groups may be a nonprofit corporation in their state, but that have not filed for IRS tax-exemption. (Click here to learn about the difference between a nonprofit corporation and a tax-exempt organization.)
Click here to see a list of types of nonprofits that do not need to file tax returns each year.
Your organization’s Form 990 is due on the 15th day of the 5th month after the end of the organization’s taxable year. This means that if your organization follows the calendar year, your Form 990 would be due on May 15th of each year.
Also, if your tax-exempt organization generated $1,000 or more of unrelated business income (income generated by the nonprofit organization from activities that are not related to the exempt mission of the entity), you will have to file a Form 990-T.
Learn More: What is Unrelated Business Income Tax?