The Nonprofit Form 990: FAQ Guide to Filing Tax Returns

For many nonprofits, furthering your purpose means that fundraising and program-specific activities are your main focus, and finances take a backseat in your day-to-day operations. However, effective financial management is essential to running your nonprofit, especially when it comes to filing your annual tax forms correctly and on time.

In this guide, we’ll answer some frequently asked questions about one of the most common nonprofit tax documents, Form 990. Registered nonprofits file Form 990 every year, but the process can look different depending on your organization’s size and status. Let’s get started.

What Is the Nonprofit Form 990?

The nonprofit Form 990 is the tax return document that registered 501(c)(3) organizations file with the IRS annually. It breaks down your nonprofit’s revenue and expenses for the year and includes additional data such as employee salaries and organizational policies. The IRS reviews all of this information to make sure you still qualify as a tax-exempt organization.

When your organization initially registered with the IRS to be a 501(c)(3) nonprofit, you should have filled out a different but related document, Form 1023. There are other tax forms that apply to nonprofits, but these two are the most common. In most cases, Form 1023 only needs to be filed once to establish an organization as tax exempt, while your organization is required to complete Form 990 every year to maintain your 501(c)(3) status.

Why Do Nonprofits Need to File Form 990?

If you’re new to the nonprofit world, you might ask, “I thought my organization was tax-exempt, so why do I need to file an annual tax return?” The most important answer is that it’s a matter of legal compliance. However, there are several other benefits to filing your nonprofit Form 990, such as:

• Maintaining your tax-exempt status. Organizations can only be tax-exempt if they show the IRS that they continue to qualify year after year. If a nonprofit fails to file Form 990 three years in a row, the IRS can revoke that status. This situation is the main exception to the rule of only filing Form 1023 once, as organizations reapplying for 501(c)(3) status will have to complete it again.
• Saving your organization money. Not filing Form 990 by the deadline can incur fines for nonprofits. The exact amount depends on the organization’s size, but it’s often a significant penalty.
• Increasing transparency with stakeholders. Once nonprofit Form 990s are filed, they become publicly available. This allows potential donors, grantmakers, and corporate sponsors to get a clear picture of organizations’ financial positions before deciding to contribute.

Filing Form 990 on time is an essential part of your nonprofit’s success. Along with maintaining your tax-exempt status, you’ll save money and show supporters exactly how you’re using their valuable donations.

Which Type of Form 990 Should My Nonprofit File?

While most nonprofits file Form 990, not all organizations file the exact same document. Depending on your nonprofit’s total annual revenue, you’ll complete one of four different versions of Form 990, which include:

• Form 990-N. Also known as the Form 990 e-Postcard, small nonprofits with less than $50,000 in annual gross receipts can file Form 990-N. There is no printout available for this form. Instead, each organization fills out a short series of entry fields directly on the IRS website.
• Form 990-EZ. This form is meant for mid-sized nonprofits with annual gross receipts totaling between $50,000 and $200,000. A condensed version of the full Form 990, Form 990-EZ is about four pages long when printed.
• Form 990. Only the largest nonprofits with more than $200,000 in annual gross receipts need to complete the full Form 990, which is about 12 pages long.
• Form 990-PF. All private foundations are required to use this version, regardless of annual gross receipts. Form 990-PF is 13 pages long and includes information specific to foundations about grantmaking and relationships with other 501(c)(3) organizations.

Make sure to do your research and keep track of your nonprofit’s gross receipts throughout the year so you know which form to complete when your filing deadline approaches. Being prepared in this way saves your organization time and helps ensure your form will be approved.

When Is the Deadline for Nonprofits to File Form 990?

Your nonprofit Form 990 deadline is the 15th day of the fifth month after your organization’s fiscal year ends. If your nonprofit’s fiscal year follows the calendar year, your Form 990 deadline is May 15. If your fiscal year were to run from July to June, your deadline would be November 15.

If you’re filing the full Form 990, Form 990-EZ, or Form 990-PF and need extra time to complete the document, your nonprofit can use Form 8868 to apply for an extension from the IRS. Form 990-N isn’t eligible for extensions, so if your organization is filing that version, make sure to get started early so you can submit it by the deadline.

The nonprofit Form 990 is an essential part of effective financial management at your organization. If you do your research to complete the correct form carefully before the deadline, you can set your organization up for ongoing success in revenue generation, donor management, and other day-to-day operations.

Is your organization ready for the end of your fiscal year and tax season? Download our End of Fiscal Year Checklist to make sure!