What Nonprofits Should Know About Form 990
An overview of the Form 990 series, filing thresholds, reporting requirements, due dates, and why good nonprofit accounting matters.
Form 990 Is More Than a Tax Return
Most tax-exempt organizations have an annual IRS filing obligation even though they may not owe federal income tax.
The Form 990 series provides information about an organization's finances, activities, governance, compensation, and compliance. Many Form 990 filings are also publicly available, making the return an important financial communication document as well as a compliance requirement.
Which Form Does a Nonprofit File?
The appropriate return generally depends on the organization's size and type.
Under current IRS thresholds:
Form 990-N
Generally available to eligible organizations whose gross receipts are normally $50,000 or less.
Form 990-EZ
Generally available when gross receipts are less than $200,000 and total assets are less than $500,000.
Form 990
Generally required when gross receipts are $200,000 or more or total assets are $500,000 or more.
Private foundations generally file Form 990-PF regardless of financial size. Special rules and exceptions apply to certain organizations.
What Does Form 990 Report?
Depending on the form and organization, reporting can include:
- Revenue and expenses
- Assets and liabilities
- Program activities
- Compensation
- Governance
- Contributions
- Fundraising
- Transactions with interested persons
- Public charity status
- Unrelated business activities
- Supplemental schedules
For 501(c)(3) organizations filing Form 990 or 990-EZ, Schedule A is generally used to report public charity status and public support information.
When Is Form 990 Due?
The annual return is generally due on the 15th day of the fifth month after the organization's tax year ends. For a calendar-year organization, that is generally May 15, subject to weekends and holidays.
What Happens If a Nonprofit Doesn't File?
This is particularly important.
An organization that fails to file its required annual return or notice for three consecutive years generally has its federal tax-exempt status automatically revoked.
Good Nonprofit Accounting Makes Form 990 Easier
A well-maintained accounting system should properly distinguish items such as:
Programs | Administration | Fundraising | Restricted Activity | Unrestricted Activity
The better the underlying accounting, the more efficient and reliable the year-end reporting process becomes.
At Akato & Associates, we work with nonprofit organizations on accounting, Form 990 compliance, and financial reporting designed to support stronger stewardship.
This material is provided for general information only and does not constitute accounting, tax or legal advice. It does not take account of your particular circumstances. Contact the firm before acting on anything you read here.