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-EZ 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.
The IRS Form 990-EZ instructions are both invaluable and authoritative. The Form 990 instructions include a glossary defining the important terms used throughout the form, and you may find this useful as a reference. Read the 990-EZ 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-EZ informational return for a tax exempt organization is done in the Business Program of TaxSlayer Pro. Follow the steps below for best results.
- From the Main Menu of TaxSlayer Pro select:
- 990 - Exempt Organizations
- 990-EZ Program
- Tax-exempt Status - Choose the appropriate filing status, choosing among 501(c)(3), another part under section 501(c), 4947(a)(1), or 527.
- Group Exemption Number - If this organization is a subordinate part of a group, enter the four-digit Group Exemption Number (GEN) here. This number can be gotten from the parent organization. (Note: Entering this number and filing this return assumes the parent organization did not include this subordinate organization on its return.)
- Form 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.
- Organization is not required to attach Schedule B (Form 990) - Schedule B, Schedule of Contributors, is required for certain returns:
- A 501(c)(3) organization that either:
(a) meets the 33-1/3% support test, and
(b) checked one of the check boxes on Schedule A Part II lines 13, 16a, or 16b, and
(c) received contributions from any one contributor totaling the greater of $5,000 or 2% of Form 990-EZ line 1
doesn't meet the 33-1/3% support test but did receive contributions totaling $5,000 or more from any one contributor.
- A 501(c)(7), (8), or (10) organization filing Form 990-EZ that received from any one contributor, during the year, total contributions of more than $1,000 exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.
- An organization that received during the tax year contributions of $5,000 or more from any one contributor and is not a 501(c)(3), (7), (8), or (10) organization.
- A 501(c)(3) organization that either:
- 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.
When you are finished editing the Heading Information, select Exit to display the main interactive screen for the form.
Before going further, 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. This schedule 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-EZ 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 the prior year's Schedule A, if it was completed, or the prior four years Forms 990.
- 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-EZ. You will need to delete the Form 990-EZ 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-EZ before starting the Form 990-PF.
- Enter the organization's revenues. From the Main Menu of the Form 990-EZ, select:
- Part I - Revenue, Expenses & Net Assets
- Total Revenue - Enter revenue in the appropriate category.
- Parts I - Revenue, Expenses & Net Assets - Enter the organization's expenses in the seven menu lines that follow the Revenue menu.
- Parts II - Balance Sheets - Enter the beginning and ending balances for four categories. Note that Other Assets and Total Liabilities require a description as well as an amount.
- Organization's primary exempt purpose - The form provides 50 characters to succinctly describe the organization's purpose that relates to its status as an exempt organization.
- Program Service Expenses (1)
Program Service Expenses (2)
Program Service Expenses (3) - Enter information related to the program service accomplishments for the three largest program services, as measured by total expenses incurred. For each menu line, describe how the service achieved the organization's exempt purpose, enter the amount of any grants given and the total expenses incurred related to the service.
- Other Program Service Expenses - Enter the same kind of information related to other program services, if any, that are important to the organization. If desired, additional information or explanation can be be entered on Schedule O.
- Additional Explanations (Schedule O) - Enter any additional information deemed important related to the program services.
- Schedule A, Supplemental Information - 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. If you did not evaluate whether or not Schedule B needs to be completed while completing the Heading Information, you'll need to do so. See the 990-EZ 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 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 G, 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 L, Transactions With Interested Persons - 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.)
- 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.
Filing Form 990-EZ 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.
However, if the return was filed electronically but was rejected and the reject condition cannot be resolved, before filing a paper return the organization should call the IRS e-Help Desk at 866.255.0654 for assistance. See Publication 4163 here for more information.
Note: Unless the IRS has authorized the organization to paper file its Form 990-EZ, a return filed in paper form rather than electronically will not be considered filed at all.
IRS: Published Guidance for Exempt Organizations (includes a wealth of information)