If you’re running a nonprofit, are even an officer or board member, you may think your organization doesn’t need to file a tax return. While it’s true that tax-exempt nonprofits do not pay federal taxes, they do have to file an information form with the IRS. That form is called a 990. This form, and the information filed along with, ensure that nonprofits conduct their business in a way that is consistent with their public responsibilities.

Does my nonprofit need to file a 990?

The short answer is – probably. If you’re nonprofit fits into any of the following categories, you’ll need to submit a 990.

• All private foundations, regardless of income, file a Form 990-PF.
• Most tax-exempt organizations with gross receipts of $200,000 or assets worth $500,000.
• Larger nonprofits that have gross receipts of more than $50,000 may file Form 990 or 990-EZ.
• Small nonprofits with gross receipts of $50,000 or less must file the 990-N (e-Postcard) to maintain their exempt status.

What organizations are exempt from filling form 990?

• Churches and most faith-based organizations such as religious schools, missions or missionary organizations.
• Subsidiaries of other nonprofits, where there may be a group return filed by the parent group.
• If you are an incorporated nonprofit or an unincorporated nonprofit in your state but don't plan to apply to the IRS for exemption from federal income tax, you don't have to file a Form 990.

When do I file Form 990, and what happens if I don’t?

It's important that you file and that you do so on time. If you don't file a Form 990 for three years in a row, your tax-exempt status will be automatically revoked by the IRS.

There are consequences if you don't submit a return when required, and nonprofits are not exempt from audits or inquiries from the IRS. You may even have your nonprofit status revoked.

You must file your 990, 990-EZ, 990-N, or 990-PF by the 15th day of the 5th month after your accounting period ends. So, if your fiscal year ends on December 31, the 990 is due on May 15 of the following year. Two ninety-day extensions are allowed, except for 990-N (postcard) filers.

Many nonprofits have lost their tax-exempt status in recent years because they did not file a 990 as required. These are often small nonprofits that did not realize that even with receipts under $50,000, they must file the 990-N. 

The 990-N is a postcard with minimal information that can be filed electronically. Don't miss doing so. If you think that your status has been revoked, check this IRS page for details.

If you do lose your exempt status by not filing the 990, there is no appeal process with the IRS. Your nonprofit could have to pay income taxes, user fees, and have to file additional paperwork. Avoid this arduous process by filing on time each year. If your nonprofit needs assistance with filing their 990 or determining their tax status, please reach out to me. Your first call with me is always complimentary and I offer a discounted rate for nonprofits that need ongoing accounting support.