Running a nonprofit means staying on top of IRS filing requirements. Failure to file can result in penalty fees; tax-exempt revocation, and taxes may be due on the income you collected if your exemption is revoked.
This guide will help you understand key filing details, deadlines, and how to stay compliant. The IRS also offers online training.
Which Form 990 Series Do I Need to Use?
There are several variations of Form 990. Which form to use depends on your nonprofit:
Form 990-N (e-Postcard)
Easiest reporting requirements.
For small nonprofits with annual gross receipts less than or equal to $50,000.
Some categories of nonprofits are not permitted.
You may still elect to file Form 990 or 990-EZ. This can be desirable if you want the information to be public in order to build donor trust, and some grants or states may require it. Find out if you need 990-EZ in your state.
IRS 990-N User Guide, 990-N FAQ.
Form 990-EZ (Short Form)
Less complex reporting requirements than full Form 990.
For small to medium sized organizations with gross receipts less than $200,000 AND total assets less than $500,000.
As with the 990-N, you may still elect to file Form 990.
Form 990 (Standard)
Most comprehensive of the 990 series.
For larger nonprofits with gross receipts greater than or equal to $200,000 OR total assets greater than or equal to $500,000.
Form 990-PF (Private Foundations)
This form is for private foundations only.
Includes detailed information about grants, investments, and trustees
Required regardless of financial size
Form 990-T — Unrelated Business Taxable Income
Unrelated Business Taxable Income (UBTI) refers to the income generated by a tax-exempt organization from activities that are not substantially related to its exempt purpose.
For example, if a charity runs a thrift store that sells donated items, the income from that store is typically not considered UBTI. However, if the charity operates a for-profit business unrelated to its mission, such as a commercial parking lot, that income could be subject to UBTI tax.
Required when income not directly related to a nonprofit’s exempt purpose.
Can be filed by any type of tax-exempt organization.
When Are the Filing Deadlines?
If your fiscal year ends on December 31st, your return is due May 15th of the following year. (Unless that falls on a weekend, in which case it will be the following business day.) Your fiscal year is stated on the last 990 you filed.
If your fiscal year ends on a different day, your return is due on the 15th day of the 5th month after the end of your nonprofit’s fiscal year. For example, if your fiscal year ends on June 30, your Form 990 is due November 15.
Can I Get an Extension?
You cannot request an extension for Form 990-N, but there is no penalty for submitting it late.
Forms 990, 990-EZ, 990-PF and 990-T are eligible for an automatic 6 months extension. An organization will only be allowed one 6 months extension per return in a given year. To apply for an extension, use Form 8868 (IRS Instructions). The automatic 6-month extension will be granted if:
the form is properly completed,
filed before the due date on your annual return, and
any balance due on line 3c is paid by the due date for the return for which the extension applies.
Note: Filing for an extension for your tax filing does not extend the deadline for any taxes owed.
What Should I Do if I Am Late?
If you miss the filing deadline, file as soon as possible to minimize penalties.
What Are the Penalties If I Am Late?
For Form 990, 990-EZ, 990-PF and 990-T, the IRS imposes penalties if there is no reasonable cause for late filing. (See ‘Can I Get Penalties Reduced?’). Penalties are based on gross receipts. Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses.
If you failed to file in 2023, the penalties were:
$20 per day for organizations with annual gross receipts under $1,208,500, up to a maximum of $12,000 or 5% of gross receipts, whichever is less.
$120 per day for organizations with annual gross receipts over $1,208,500, with a maximum penalty of $60,000.
If you fail to file in 2024, they will be:
$25 per day for organizations with annual gross receipts under $1,274,000, up to a maximum of $12,500 or 5% of gross receipts, whichever is less.
$125 per day for organizations with annual gross receipts over $1,274,000, with a maximum penalty of $63,500.
Can I Get Penalties Reduced?
Possibly. You may be able to have the penalties reduced or eliminated if you have a reasonable cause for the filing being late. You can make your case by adding a statement with your 990. It should address the following:
The reason the penalty was charged. The daily delinquency penalty may be charged for either a late filed return, an incomplete return, or both.
Explain what prevented the organization from complying with the law, including:
what prevented the organization from requesting an extension, if the organization did not request such an extension;
how the organization was not neglectful or careless, but exercised ordinary business care and prudence; and
what steps have been taken to prevent the same situation from occurring in the future.
Other Things To Keep In Mind
990 as a Marketing Tool: Some potential donors review a nonprofit's Form 990 before deciding whether to contribute. Ensure the narrative section clearly and compellingly tells your nonprofit's story. Many fundraisers consider the Form 990 a valuable marketing tool.
State Filing: Don’t forget your state filing requirements.
Proper Signature Requirements: Form 990 must be signed by an authorized officer, such as the current president, vice president, treasurer, or chief accounting officer. Incorrect or incomplete filings can result in penalties.
Recordkeeping Requirements: Keep records supporting Form 990 series filings for at least three years from the filing date or the return’s due date, whichever is later.
Good Governance: Good governance practices require the full board of directors to review the Form 990 prior to filing. These are other good governance practices to consider.
Need Help: 501cBookkeeping can help get your financial reports in order and make 990 filings a simple affair.
Stay Compliant and Thrive
Staying current with IRS filing requirements ensures your nonprofit remains in good standing. If you need help navigating Form 990 or organizing your financial records, reach out for expert support. Your mission is too important to risk compliance issues!
This article is for informational purposes only and does not constitute tax, legal, or accounting advice.