1. Support
  2. Business Program / Business Returns
  3. Exempt Organization Returns - Form 990

Creating a Basic Form 990 - Return of Organization Exempt From Income Tax

Organizations that are exempt from income tax under IRC section 501(a) are required to file an annual information return, and the type of return filed will vary depending on the type of organization, the amount of gross receipts for the year, and the amount of assets at the end of the year. The return is due on May 15 for calendar year filers. Types of returns:

  • Form 990, Return of Organization Exempt from Income Tax is required to be filed by organizations whose gross receipts are $200,000 or more or whose total assets are $500,000 or more at the end of the tax year.
  • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax can be filed by organizations whose gross receipts are less than $200,000 and total assets are less than $500,000 at the end of the tax year. An organization eligible to file a 990-EZ may file a 990 if it wishes.
  • Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ can be filed by organizations whose gross receipts are $50,000 or less, as well as a 509(a)(3) organization that (a) supports a 501(c)(3) religious organization and (b) normally has gross receipts of not more than $5,000. See the Form 990 instructions for a list of organizations not required to file Form 990 or 990-EZ who can file Form 990-N. An organization otherwise eligible to file a 990-N may choose to file either a 990 or a 990-EZ if it wishes.
  • Form 990-PF, Return of Private Foundation is filed by, among others, exempt or taxable private foundations, Section 4947(a)(1) nonexempt charitable trusts treated as private foundations, and certain organizations that agree to or claim private foundation status. See the Form 990-PF instructions to determine if a particular entity needs to file this return or not.
  • Form 990-T. Exempt Organization Business Income Tax Return is filed by exempt organizations that have unrelated business income of $1,000 or more. An organization files form in addition to their other type of Form 990. An organization that doesn't have a 990 filing requirement, such as a church, must file Form 990-T if it has unrelated business income of $1,000 or more.

There are numerous qualifications and exceptions to the reporting requirements based on the type of organization, thus a particular return type may not be available to a particular organization. Be sure to have a copy of the IRS determination letter for the organization. It will tell you what section of the IRC this organization falls under and what returns the IRS is expecting to receive. Otherwise, if in doubt about which return to file or which returns can be filed for a particular organization, see the IRS instructions for each return type to determine the correct return to file.

If a tax exempt organization is eligible to file a Form 990-EZ or Form 990-N but voluntarily elects to file Form 990, it must file a complete Form 990.

The IRS Form 990 instructions are both invaluable and authoritative, and they include a glossary defining the important terms used throughout the form. Read the instructions before attempting to complete the form.

While answering the questions in the software, based on the answer you provide you may also be presented with a Description window with space for narrative text. Don't bypass these windows; they are important. Enter whatever information is needed to explain or clarify the answer.

Creating a Form 990 informational return for a tax exempt organization is done in the Business Program of TaxSlayer Pro. There is a flow to completing the Form 990 but it's not in menu or Part order. Preparation should generally follow the steps below for best results.

Steps to preparing Form 990

  1. From the Main Menu of TaxSlayer Pro select:
  • Business
  • 990 - Exempt Organizations
  • 990 Program
  • Enter the EIN of the tax exempt organization. You will be queried if you want to create a new return. Select YES.
  • Enter the name and address of the organization, then select OK.
  • In the Name & Address Menu complete the remaining information, including especially the name and title for the officer signing the return for this organization. The Officer is the individual that is responsible for filing the return, typically the President or Treasurer of the organization, and this information populates in Form 990 Part II, the Signature Block. Officer information is required and must be entered in order to electronically file the return. From this menu you may also enter an optional e-mail address for correspondence from the IRS to the organization, as well as the organization's phone number. When finished, select Exit.
  • You will then be prompted for two important bits of info:
    • the section of the Internal Revenue Code from which this organization derives its tax exempt status;
    • the type of entity.
  • In the Heading Information Menu, enter fiscal year information if the organization does not operate on a calendar year. Do not enter dates in this field if the organization operates on a calendar year basis, nor if the organization has a short year that ends December 31. Only enter information here if the entity's year ends on a day different than December 31. The dates entered must match the dates in the IRS's records or the return will reject when e-filed.
  • In the Heading Information Menu, select Other Information. For each menu item, change the YES or NO answer as needed or provide the required information as needed. To highlight a few items:
    • Tax-exemption Status - 501(c)(3) is the default. If the status is under a different 501(c) section or other IRC section, select the line and change as appropriate.
    • Type of Organization - Indicate the type of entity as recognized by the state of legal domicile, whether a corporation, an unincorporated association, a trust, or choose Other for any other type such as a partnership or LLC.
    • Group return for subordinate - If a parent organization is including subordinate organizations, indicate that here and enter the information about the subordinates.
    • Group Exemption Number - If the group noted above has a four-digit Group Exemption Number (GEN), enter that here.
    • E-File return on a Form 990-N, e-Postcard - Indicate if you would file a notice on Form 990-N. Be sure the entity qualifies. See here for more information about Form 990-N.
    • Name and Address of Principal Officer - The Principal Officer may or may not be the same as the officer previously entered. The Principal Officer is the officer who has ultimate responsibility for implementing the decisions of the board or for managing the organization.

    When you are finished editing the Heading Information, select Exit to display the main interactive screen for the form.

    If you're filing Form 990-N, you're done with the return and it's ready to e-file, otherwise keep going.

    Completing Schedule A

    Before going further with the main form, has this organization been in existence for longer than 5 years and in its IRS determination letter is it described as any one of the following?

    • An organization that provides support for a state college or university, as described in IRC section 170(b)(1)(A)(iv).
    • An organization that receives substantial support from a governmental unit or from the general public, as described in IRC section 170(b)(1)(A)(vi).
    • An organization supported by exempt function income, as described in IRC section 509(a)(2).

    If so, complete Schedule A, otherwise continue to step 8 below.

    Schedule A is used to determine if the organization meets the tests to be considered a public charity rather than a private foundation. From the Main Menu of the Form 990 select:

    • Additional Forms and Schedules
    • Schedule A - Supplementary Information
    • Select the description on menu lines 1-12 appropriate for the organization. The organization's IRS determination letter indicates the correct description.
    • Does the selection remove the asterisk from menu lines Part II or Part III? If so, complete that Part, entering the totals for all the organization's sources of income. Accurately completing this section of the schedule will require you having a copy of either the prior year's Schedule A, if it was completed, or the prior four years' Forms 990 or 990-EZ.
    • Once all the sources of income have been entered:
      • if completing Part II select Computation of Public Support Percentage. Note the menu line Private Foundation. If this line is answered YES, select 10 % Facts and Circumstances Test for the current year and answer the Yes/No question. If the answer is No, select 10 % Facts and Circumstances Test for the prior year and answer the Yes/No question. If the answer also is No, don't continue any further. The organization will need to file a Form 990-PF instead of Form 990. You will need to delete the Form 990 before starting the Form 990-PF.
      • if completing Part III note the menu line Private Foundation. If this line is answered YES, if you haven't already done so enter the Public Support Percentage and Investment Income Percentage for the prior year. If Private Foundation is still indicated YES, don't continue any further. The organization will need to file a Form 990-PF instead of a 990. You will need to delete the Form 990 before starting the Form 990-PF.
    1. Enter the organization's revenues. From the Main Menu of the Form 990, select:
    • Parts VIII, IX, X, XI, and XII
    • Part VIII - Statement of Revenue
  • Enter the organization's expenses. From the Main Menu of the Form 990, select:
    • Parts VIII, IX, X, XI, and XII
    • Part IX - Statement of Functional Expenses
  • Enter the organization's balance sheet items: assets, liabilities, and fund balances. From the Main Menu of the Form 990, select:
    • Parts VIII, IX, X, XI, and XII
    • Part X - Balance Sheet
  • Complete Part IV. From the Main Menu of the Form 990, select Checklist of Required Schedules. Answer all the questions under each section, and for each question make a note of the Schedule, Part, and Line Number required to be completed based on your answer.
  • Complete Part VII. From the Main Menu of the Form 990, select Compensation of Officers, etc. and enter information about the organization's officers, directors, trustees, key employees, five highest compensated employees, and independent contractors.
  • Complete Schedule R. Enter information about Related Organizations and Unrelated Partnerships, if there are any. From the Main Menu of the Form 990, select:
    • Additional Forms and Schedules
    • Schedule R - Related Organizations and Unrelated Partnerships
  • Complete Part III. Enter information describing what the organization accomplished during the year. From the Main Menu of the Form 990, select Program Service Accomplishments. Note that when entering program service expenses, you must enter at a minimum two bits of information: the amount of the expense and how the organization's exempt purpose was achieved. The return will reject if one of those is missing.
  • Complete Part V. Enter information about other IRS filings and compliance with certain aspects of the tax code. From the Main Menu of the Form 990, select IRS Filings & Tax Compliance.
  • Complete Part XI. If the net assets of the organization's audited financial statements differ from the net assets on the Form 990, the difference needs to be explained here. From the Main Menu of the Form 990, select:
    • Parts VIII, IX, X, XI, and XII
    • Part XI - Reconciliation of Net Assets. The differences can include the following:
      • The market value of investments on the books at the end of the year;
      • The value of services or facilities donated to the organization less the value of services or facilities donated by the organization, as reported on the organization's income and expense statements;
      • Program-related investment expenses (these are not included on Schedule D). Program-related investments are made to accomplish the organization's exempt purpose, rather than merely to produce income;
      • Prior year adjustments, generally due to math errors, mistakes, or changes in accounting principles;
      • Changes in net assets or fund balances. Include an explanation on Schedule O for any item on this line, such as:
        • losses on uncollectible pledges
        • refunds of contributions and program service revenue
        • reversal of grant expenses
        • difference between the fair market value and the book value of property given as an award or grant
        • any other changes in net assets or fund balances not already listed
  • Complete Part XII. Enter information regarding the organization's financial statements and the audit process. From the Main Menu of the Form 990, select:
    • Parts VIII, IX, X, XI, and XII
    • Part XII - Financial Statements and Reporting
  • Complete Schedule L. Enter on this schedule information about transactions with interested persons. (An interested person is an individual or entity that is in a position where they are able to exercise substantial influence over the organization's affairs at any time during a 5-year period that ends on the date of the transaction. See the Schedule L instructions here for more information.) From the Main Menu of the Form 990, select:
    • Additional Forms and Schedules
    • Schedule L - Transactions with Interested Persons
  • Complete Part VI. Enter information about the organization's governing body and management, as well as answering certain policy and disclosure questions. From the Main Menu of the Form 990, select Governance, MGMT & Disclosure.
  • Finish Part I. Most of the information in Part I is calculated or included based on what has already been entered up to this point. Enter any other information as needed, such as prior year revenue and expenses, beginning of the year net assets and liabilities, and the net unrelated business taxable income from Form 990-T. To complete Part I, from the Main Menu of the Form 990, select Summary.
  • Complete any schedules not already completed as indicated by the answers in Part IV. To access Schedules A through R, from the Main Menu of the Form 990, select Additional Forms and Schedules.
    • Schedule A, Public Charity Status and Public Support - For Part I, you must choose one of menu items 1 through 12 indicating the reason for the organization's charitable status. (The organization's IRS determination letter indicates the correct description.) Based on which one is chosen, one of Parts II, III, IV, V, or VI will also need to be completed with additional information.
    • Schedule B, Schedule of Contributors - Beginning with tax years ending 12/31/2018, only certain 501(c), 4947(a)(1), and 527 filers need to complete Schedule B. See the 990 instructions if uncertain about whether it needs to be completed, and see the Schedule B instructions to learn what information needs to be entered depending on the type of entity. In the Schedule B Menu, indicate if the organization is covered by the General Rule or by one of the three Special Rules. Based on the rule selection, another part of the form may need to be completed.
    • Schedule C, Political Campaign and Lobbying Activities - Schedule C is used to report the political campaign and lobbying activities of the organization.
    • Schedule D, Supplemental Financial Statements - Schedule D provides the required reporting for donor advised funds, conservation easements, certain art and museum collections, escrow or custodial accounts or arrangements, endowment funds, and other supplemental information. For some returns it is required while for others it is optional.
    • Schedule E, Schools - Schedule E is required for an organization described as a school in section 170(b)(1)(a)(ii) and covers various racially nondiscriminatory policies.
    • Schedule F, Statement of Activities Outside the United States - Schedule F may be required if an organization has foreign revenue, expenses, and/or investments above certain thresholds. See the Schedule F instructions to determine if an organization needs to include this form.
    • Schedule G, Supplemental Information Regarding Fundraising or Gaming Activities - Schedule G is required if the organization had more than $15,000 in professional fundraising expenses, more than $15,000 in fundraising event income and contributions, or more than $15,000 in gaming revenues.
    • Schedule H, Hospitals - If an organization operates a hospital facility, it will use Schedule H to report the hospital's activities, policies, and benefit to the community.
    • Schedule I, Grants and Other Assistance to Organizations, Governments, and Individuals in the United States - Schedule I is required if the organization gave grants and other assistance totaling more than $5,000 to domestic organizations, governments, and individuals.
    • Schedule J, Compensation Information - Schedule J provides information about the compensation of certain current and former officers, directors, individual trustees, key employees, and highest compensated employees, as well as information on some of the organization's compensation practices. It is required when (1) payments are made to individuals formerly associated with the organization, (2) any individual received more than $150,000 in compensation, or (3) any individual received or accrued compensation from an unrelated individual or organization for services rendered to the organization.
    • Schedule K, Supplemental Information on Tax-Exempt Bonds - Schedule K is required for organizations that have a tax-exempt bond issue with an outstanding principle of more than $100,000 as of the end of the year with an issue date after 12/31/2002.
    • Schedule L, Transactions With Interested Persons - See item 18 above.
    • Schedule M, Noncash Contributions - Schedule M is used to report noncash contributions, such as vehicles, boats, aircraft, securities, real estate, buildings, art, household goods, etc., including donated items received and sold in the same year. Not reported on this form is the donation of the use of materials, services, or facilities.
    • Schedule N, Liquidation, Termination, Dissolution, or Significant Disposition of Assets - Schedule N is required if the organization has dissolved (Part I) or if it has disposed of more than 25% of its net assets (Part II). An organization in the process of dissolving at year end doesn't complete Part I but may need to complete Part II, if applicable.
    • Schedule O, Supplemental Information to Form 990 or 990-EZ - See item 22 below.
    • Schedule R, Related Organizations and Unrelated Partnerships - See item 13 above.
  • Verify Schedule O is completed. This schedule is required and includes explanations for the answers to numerous questions in the form. Throughout the Form 990 preparation process, you are generally told if an explanation is needed on Schedule O based on the answer to a particular question. To see Schedule O and optionally add to it, from the Main Menu of the Form 990, select:
    • Additional Forms and Schedules
    • Schedule O - Supplemental Information to Form 990

    Filing Form 990 Electronically

    When all the information has been entered, select Mark Return Electronic. If any required information is missing, a two-part window headed "Reasons why return CANNOT be filed electronically" will be displayed. Select a line in the upper part indicating what is missing and the lower part will explain how to correct the problem.

    Form 990 is required to be electronically filed rather than paper filed. There are
    no waivers to this requirement, so you must correct any of the problems you see.

    If the e-filed return has rejected and the reject condition cannot be resolved, call the IRS e-Help Desk at 866.255.0654 for assistance.

    Note: Unless the IRS has authorized the organization to paper file its Form 990, a return filed in paper form rather than electronically will not be considered filed at all.

    Additional Information:

    IRS: Form 990 Filing Tips

    IRS: Published Guidance for Exempt Organizations (includes a wealth of information)

    IRS: Publication 557, Tax-Exempt Status for Your Organization