Form 990 The Nonprofit Sector in the United States: A Resource Guide Research Guides at Library of Congress

Share your love

form 990 instructions

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.

form 990 instructions

However, a Form 990 return prepared according to ASC 958 will be acceptable to the IRS. A section 501(c)(3), 501(c)(4), or 501(c)(29) organization that is tax exempt under section 501(a), or that was such an organization at any time during the 5-year period ending on the day of the excess benefit transaction. For purposes of Schedule F (Form 990), Statement of Activities Outside the United States, include grantmaking, fundraising, unrelated trade or business, program services, program-related investments, other investments, or maintaining offices, employees, or agents in particular regions outside the United States.

Bonus Step: You can always file for an extension.

For a correction of an excess benefit transaction described under Donor advised funds, earlier, no amount repaid in a manner prescribed by the IRS can be held in a donor advised fund. To avoid the imposition of the 200% tax, a disqualified person must correct the excess benefit transaction during the tax period. Non-Profit Accounting: Definition and Financial Practices of Non-Profits The tax period begins on the date the transaction occurs and ends on the earlier of the date the statutory notice of deficiency is issued or the section 4958 taxes are assessed. This 200% tax can be abated if the excess benefit transaction is subsequently corrected during a 90-day correction period.

The relationship between H and J is a reportable business relationship because each is a director or officer in the same business entity. The facts are the same as in Example 3, except that (1) C conducted only director and committee activities during the tax year; (2) C didn’t conduct staff meetings and evaluations; and (3) X compensated C a reasonable amount for C’s Board Chair services during the tax year, but didn’t provide any other compensation to C in any other capacity. C’s independence as a Board member isn’t compromised by receiving compensation from X as a Board member (and not as an officer or employee). Assets held for the production of income or for investment aren’t considered to be used directly for charitable functions even though the income from the assets is used for charitable functions. It is a factual question whether an asset is held for the production of income or for investment rather than used directly by the organization for charitable purposes.


The amount of compensation reported on Form 990, Part VII, for a listed person may differ from the amount reported on Form 990, Part IX, line 5, for that person due to factors such as a different accounting period (calendar vs. fiscal year) or a different accounting method. A tax-exempt organization must file an annual information return or notice with the IRS, unless an exception applies. Annual information returns include Form 990, Form 990-EZ and Form 990-PF.

  • Blue Avocado provides space for the nonprofit sector to express new ideas.
  • The general public — especially potential donors and volunteers — can use these forms to learn about an organization’s activity.
  • Answer “Yes” on line 16a if, at any time during its tax year, the organization invested in, contributed assets to, or otherwise participated in a joint venture or similar arrangement with one or more taxable persons.
  • “Indoor tanning services” are services employing any electronic product designed to incorporate one or more ultraviolet lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning.
  • For special instructions about the treatment of disregarded entities and joint ventures for various parts of the form, see Appendix F.
  • Report amounts for a particular public official only if aggregate expenditures for the year relating to such official (including family members of such official) exceed $1,000 for the year.

Revenue generated by the organization in the form of various contributions, grants, and program service activities must be reported under Part VIII, Statement of Revenue. If the organization has revenue generated from various other sources, the details of that other revenue must also be reported. Organizations filing Form 990 may be required to complete Part IV, Checklist of Required Schedules which depends on the information provided on the information return.

Instructions to complete Form 990 Part I – Summary

Answer “Yes” whether the activity was conducted directly or indirectly through a disregarded entity or a joint venture or other arrangement treated as a partnership for federal income tax purposes and in which the organization is an owner. In such a case, the organization must check the “Application pending” checkbox on Form 990, Item B, page 1 (whether or not a Form 1023, 1023-EZ, 1024, or 1024-A has been filed) to indicate that Form 990 is being filed in the belief that the organization is exempt under section 501(a), but that the IRS hasn’t yet recognized such exemption. If an organization has gross receipts less than $200,000 and total assets at the end of the tax year less than $500,000, it can choose to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, instead of Form 990.

Leave a Reply

Your email address will not be published. Required fields are marked *