Key Takeaways

  • Most tax-exempt nonprofits must file an annual IRS Form 990, even if they owe no taxes.
  • The type of Form 990 a nonprofit files depends on annual gross receipts and assets.
  • Failure to file for three consecutive years can result in automatic revocation of tax-exempt status.
  • E-filing is now mandatory for most tax-exempt organizations.
  • Filing extensions are possible using Form 8868, but not for Form 990-N.
  • Organizations must maintain transparency and public trust through accurate filings.

What are not-for-profit tax returns, and are you required to file one for your organization? Most charitable nonprofit organizations are still required to file tax returns with the IRS annually, even if they have achieved tax-exempt status. "Tax-exempt" means these nonprofit organizations do not pay federal taxes on income that's associated with their expressed mission and programs. However, the IRS still requires an informational return filing, called IRS Form 990. For example, all Section 501(c)(3) private organizations must file a Form 990 annually.

Using Form 990, the IRS and the public can evaluate the organization's operations. The form contains information pertaining to the nonprofit organization's purpose, programs, and financial information. As the law does not require annual reports from tax-exempt organizations, documents such as Form 990 allow for public disclosure of important information related to the organization. Available on GuideStar and upon request from the nonprofit organization, Form 990 is a public document as per the IRS "public disclosure" regulations.

Types of IRS Form 990

Depending on the filing year and gross receipts of the nonprofit organization, different types of Form 990 may be used. The different types include Forms 990, 990-EZ, 990-N, and 990-PF. Information provided by the IRS can help you decide which form you need to file.

  • Form 990 can be used by larger nonprofit organizations with gross receipts of more than $50,000.
  • Form 990-EZ is a short form return that can be used by nonprofit organizations with total receipts of $100,000 and less than $250,000 in assets.
  • Form 990-N (e-Postcard) can be used by smaller nonprofit organizations with gross receipts of less than $50,000.
  • Form 990-PF can be used by private foundations.
  • Form 8868 can be used to request an automatic three-month extension of filing time.

When to Use Each Version of Form 990

To determine which IRS Form 990 to file, organizations must assess both their gross receipts and total assets. Here’s how to know which version applies:

  • Form 990-N (e-Postcard): For organizations with gross receipts normally $50,000 or less. Filing is only available electronically and cannot be extended.
  • Form 990-EZ: For organizations with gross receipts less than $200,000 and total assets less than $500,000. This is a simplified form but still requires detailed information on revenue, expenses, and governance.
  • Form 990: Required for organizations with gross receipts of $200,000 or more or total assets of $500,000 or more. It provides a full picture of the nonprofit’s finances and operations.
  • Form 990-PF: Mandatory for all private foundations, regardless of financial activity or size.

Keep in mind that failing to file the correct form can trigger IRS notices or penalties, so it’s essential to choose accurately based on your organization’s financials.

Do All Nonprofit Organizations Need to File a Form 990?

Not every nonprofit organization is required to file an annual tax return. In general, the organizations that do not need to file a Form 990 are:

  • Branches of other nonprofits: Subsidiaries of larger nonprofit organizations may be covered under a general return filed by the parent nonprofit organization.
  • Many government corporations.
  • State organizations that provide essential services
  • Smaller nonprofit organizations: Those with annual incomes of $25,000 or less do not need to file; this is most likely due to staffing and cost constraints of the IRS.
  • Nonprofit organizations not yet in the system: Organizations that have not yet applied for exemption from federal income tax are not required to file a Form 990 as the IRS would not yet have the organization's information.
  • State institutions: Organizations that provide essential services, such as universities, do not need to file a Form 990.
  • Churches and other faith-based organizations

Consequences of Failing to File Not-for-Profit Tax Returns

Failure to file the appropriate not-for-profit tax returns for three consecutive years will result in automatic revocation of your organization’s tax-exempt status. If revoked, the nonprofit:

  • Must pay corporate income tax on annual earnings.
  • Loses eligibility for tax-deductible donations.
  • Must reapply for tax-exempt status by filing Form 1023 or 1024 and paying applicable fees.

Once an organization is placed on the IRS revocation list, regaining tax-exempt status can take months and may require significant legal and administrative effort. Always track your filing deadlines and retain copies of submitted forms.

Filing an IRS Form 990

  1. Determine if you need to file by checking with the IRS.
  2. Determine which tax form to file, depending on the amount of money your organization made in the applicable tax year.
  3. Fill out the appropriate tax form. For smaller nonprofit organizations, a manager may suffice for filling out the form. For larger nonprofit organizations, it may be wise to consult an accountant experienced in handling tax-exempt financial information and returns.
    It's important to print both the form and the instructions and make sure you follow the instructions for each item in order to provide the appropriate information.
  4. Submit your tax return on time either by e-filing or mailing it to the IRS.
    The address for mailing returns is:
    Department of the Treasury
    Internal Revenue Service Center
    Ogden, UT 84201-0027

Your tax return due date is dependent on your organization's fiscal year. Your tax return will be due on the 15th day of the fifth month after the end of your nonprofit organization's fiscal year. You must file your tax return form with the IRS before that deadline for it to be valid for that year.

Should you need an extension, the IRS offers an extension form (Form 8868). You must submit your extension no later than your return due date. If your nonprofit organization fails to file tax returns, severe penalties may result, including the loss of tax-exempt status. You may not extend the due date for Form 990-N (e-Postcard. However, there is no penalty for filing it late.

Key Deadlines and How to Stay Compliant

The IRS Form 990 is due on the 15th day of the 5th month following the close of your fiscal year. For example, if your fiscal year ends on December 31, your return is due by May 15.

To avoid missing deadlines:

  • Set calendar reminders well in advance of the deadline.
  • Submit Form 8868 to request an automatic six-month extension (except for Form 990-N).
  • Review state-level requirements, which may differ from federal deadlines.
  • Use IRS exempt organization search tools to verify your filing status and see public Form 990s for other nonprofits.

Nonprofits that are newly formed or transitioning to tax-exempt status should clarify their initial filing requirements with a qualified professional.

Best Practices for Preparing Not-for-Profit Tax Returns

Accurate preparation of not-for-profit tax returns is essential for IRS compliance and public trust. Consider these best practices:

  • Keep detailed records year-round: Include donation receipts, expense reports, and board meeting minutes.
  • Use accounting software tailored for nonprofits: This helps maintain fund tracking, restricted donations, and grant reporting.
  • Ensure board review: Encourage your board to review and approve the Form 990 before submission.
  • File electronically: The IRS requires most exempt organizations to file electronically, which reduces errors and speeds up processing.
  • Stay up to date on IRS changes: Requirements may shift year to year; staying informed ensures ongoing compliance.

Organizations can also consult with a nonprofit tax professional or attorney to avoid common pitfalls and ensure complete and compliant filings.

Frequently Asked Questions

  1. What is a not-for-profit tax return?
    A not-for-profit tax return, typically Form 990, is an annual information return filed with the IRS by tax-exempt organizations to maintain compliance and public transparency.
  2. Do all tax-exempt organizations need to file a return?
    Most do, except certain church-related organizations, small nonprofits under $50,000 (who file Form 990-N), and government-affiliated entities.
  3. What happens if a nonprofit doesn’t file?
    Failure to file for three consecutive years results in automatic loss of tax-exempt status, which can significantly impact fundraising and operations.
  4. Can we file our not-for-profit tax return late?
    Yes, but only with an extension using Form 8868 for Forms 990 and 990-EZ. Form 990-N does not have a late filing penalty, but an extension is not available.
  5. How can I find help with our nonprofit tax filing?
    You can post your legal needs on UpCounsel to connect with experienced nonprofit attorneys who can guide your organization through tax filing and compliance.

If you need help with understanding not for profit tax returns, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.