We Are Exempt From Paying Tax, But What Do We File With the IRS?

By Samantha Ramirez, Tax Senior
ASL Nonprofit Group

For nonprofit organizations, no income tax may be due, but an annual return must be provided by certain exempt organizations in order to maintain tax-exempt status.  Tax-exempt organizations typically file a Form 990, but depending on the amount of gross receipts or the total value of assets, the organization may have options for filing a more simplified form.  Below we have outlined the requirements for each form:

Form 990-N (E-Postcard)

  • The simplest of the exempt organization forms and must be filed online through the IRS Electronic Filing System
  • Annual gross receipts of $50,000 or less
  • Certain organizations are ineligible to submit a Form 990-N and must file a Form 990 or Form 990-EZ: organizations exempt under IRC Sections 501(c)(1), 501(c)(20), 501(c)(23), 501(c)(24), 501(d), 509(a)(3), 529, 4927(a)(1), 4927(a)(2) and Section 527 political organizations
  • All private foundations must file a Form 990-PF
  • California requires Form 199N (also submitted online)

Form 990-EZ (Short Form Return of Organization Exempt From Income Tax)

  • This form is a condensed version of the full Form 990
  • Organizations with gross receipts less than $200,000 and total assets less than $500,000 can file Form 990-EZ instead of the longer Form 990

Form 990 (Return of Organization Exempt From Income Tax)

  • This form is the longest and contains the most detail
  • Required for organizations with gross receipts equal to or greater than $200,000 or total assets equal to or greater than $500,000

Form 990-PF (Return of Private Foundations)

  • Private foundations are required to file a Form 990-PF

The due date for filing these returns is five and a half months after the organization’s year end and can be extended an additional six months.  For 2016 calendar year organizations, the due date is May 15, 2017.  Exempt organizations organized in California filing Form 990-EZ or Form 990 must also file California Form 199.

One other form that often gets overlooked is Form 8822-B Change of Address or Responsible Party.  Exempt organizations often have turnover of those in charge and it is important to notify the IRS when these changes take place.  For tax-exempt organizations, the responsible party is typically the principal officer and this form should be filed within 60 days of the change.