Even though most tax-exempt organizations do not pay federal taxes, most of them have to file an annual information return, which is called a Form 990.
Form 990 is an annual information return required to be filed with the IRS by most organizations exempt from income tax under section 501(a), and certain political organizations and nonexempt charitable trusts. It has the following different forms:
- Form 990, for large nonprofits with either 1) gross receipts of $200,000 or more, or 2) total assets of $500,000 or more,
- Form 990-EZ, for nonprofits with gross receipts under $200,000 and total assets under $500,000
- Form 990-N, for small nonprofits with gross receipts of $50,000 or less
- Form 990-PF, for private foundations
An organization is exempt from filing Form 990 if it is described below:
- Certain religious organizations, like churches and most faith-based organizations
- Certain governmental organizations, like state institutions that provide essential services
- Certain political organizations
Form 990 should be filed by the 15th day of the fifth month after the organization’s accounting period ends (e.g. May 15th for a calendar year filer, and November 15th for a June 30th year end filer). Two ninety-day extensions are allowed, except for 990-N filers. If an organization fails to file an annual return or submit a notice as required for 3 consecutive years, its tax-exempt status is automatically revoked on and after the due date for filing its third annual return or notice. Organizations that lose their tax-exempt status need to file income tax returns and may need to pay income tax.
Nonprofit organizations are required to make their Form 990 and their exemption application available for public inspection during regular business hours. Many nonprofits make their Form 990 available on their website, and you can also view them at www.guidestar.org.