Many items of compensation may or may not be taxable or currently taxable, depending on the plan or arrangement adopted by the organization and other circumstances. The list attempts to take into account these varying facts and circumstances. The list is merely a guideline to report amounts for those persons required to be listed. In all cases, items included in box 1 or 5 of Form W-2 (whichever is greater), in box 1 of Form 1099-NEC, and/or in box 6 of Form 1099-MISC are required to be reported on Part VII, Section A, and, for applicable persons, Schedule J (Form 990), Part II, column (B).

A local or subordinate organization that doesn’t file its own annual information return (because it is affiliated with a central or parent organization that files a group return) must, upon request, make available for public inspection, or provide copies of, the group returns filed by the central or parent organization. A tax-exempt organization must fulfill a request for a copy of the organization’s entire application for tax exemption or annual information return or any specific part or schedule of its application or return. A request for a copy of less than the entire application or less than the entire return must specifically identify the requested part or schedule.

Fiduciary reporting

Other persons not described above can also be considered disqualified persons, depending on all the relevant facts and circumstances. The intermediate sanction regulations are important to the exempt organization community as a whole, and for ensuring compliance in this area. The rules provide a roadmap https://accounting-services.net/what-accounting-software-do-startups-use/ by which an organization can steer clear of situations that may give rise to inurement. A return, report, notice, or exemption application can be inspected at an IRS office free of charge. Copies of these items can also be obtained through the organization as discussed in the following section.

• However, answer “No” if the organization merely informed its governing body members that a copy of the Form 990 is available upon request.
• Section 512(b)(13) treats payments of interest, annuity, royalties, and rent from a controlled entity to a controlling organization as unrelated business taxable income under certain circumstances.
• For a short year return in which there is no calendar year that ends with or within the short year, don’t report any information in columns (A) through (C), unless the return is a final return.
• This amount includes contributions from donor advised funds (unless the sponsoring organization is a related organization) and from gaming activities.
• The organization must also report the activities of a disregarded entity in the appropriate parts (including schedules) of the Form 990.
• If the 25% tax is imposed and the excess benefit transaction isn’t corrected within the tax period, an additional excise tax equal to 200% of the excess benefit is imposed.

Publishing a magazine is a program service even though the magazine contains both editorials and articles that further the organization’s exempt purpose as well as advertising, the income from which is taxable as unrelated business income. Only for purposes of completing this return, the filing organization must report any rental income received from an affiliated exempt organization as program service revenue on line 2. Books and records maintained according to generally accepted accounting principles for hospitals, colleges, and universities are more specialized than books and records maintained according to those accounting principles for other types of organizations that file Form 990. Accordingly, hospitals, colleges, and universities can report, as program service revenue on line 2, sales of inventory items otherwise reportable on line 10a. In that event, enter the applicable cost of goods sold as program service expense in column (B) of Part IX. No other organizations should report sales of inventory items on line 2.

Black lung benefit trusts – Section 501(c)( organizations

For an employee who works on fundraising 40% of the time and program management 60% of the time, an organization must allocate that employee’s salary 40% to fundraising and 60% to program service expenses. It can’t report the 100% of salary as program expenses simply because the employee spent over 50% of his time on program management. It shouldn’t include contributions from gaming activities, which should be reported on line 1f. Organizations Best Online Bookkeeping Services 2023 that report more than $15,000 on line 9a must also answer “Yes” on Part IV, line 19, and complete Part III of Schedule G (Form 990). Fundraising events sometimes generate both contributions and income, such as when an individual pays more than the retail value for the goods or services furnished. Report in parentheses the total amount from fundraising events that represents contributions rather than payment for goods or services.

The organization must report amounts accurately and document the method of allocation in its records. Report any expense described on lines 1–23 on the appropriate line; don’t report such expense on line 24. Don’t report in Part IX expenses that must be reported on line 6b, 7b, 8b, 9b, or 10b in Part VIII.

Charitable Contributions

The documents include PwC’s highlights of and comments on key changes for 2021. The documents are searchable and include bookmarks to assist with navigation. 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.

• Ownership is measured by stock ownership (either voting power or value, whichever is greater) of a corporation, profits or capital interest in a partnership or an LLC(whichever is greater), membership interest in a nonprofit organization, or beneficial interest in a trust.
• Private foundations must use Form 990-PF to report on their assets, trustees, officers, grants, philanthropy, and other financial activities.
• Under section 6652(c)(1)(A), a penalty of $20 a day, not to exceed the lesser of $11,000 or 5% of the gross receipts of the organization for the year, can be charged when a return is filed late, unless the organization shows that the late filing was due to reasonable cause.
• Generally, shares of stock in a closely held company that isn’t available for sale to the general public or which isn’t widely traded (see further explanation in the instructions for Part X, line 12, and Schedule M (Form 990), Noncash Contributions, line 10).
• The following is a list of special instructions for the form and schedules regarding the reporting of a disregarded entity of which the organization is the sole member.
• The codes listed in this section are a selection from the North American Industry Classification System (NAICS) that should be used in completing Form 990, Part VIII, lines 2 and 11.

A donor gives a charity $100 in consideration for a concert ticket valued at $40 (a quid pro quo contribution). Because the donor’s payment exceeds $75, the organization must furnish a disclosure statement even though the taxpayer’s deductible amount doesn’t exceed $75. Separate payments of $75 or less made at different times of the year for separate fundraising events won’t be aggregated for purposes of the $75 threshold. A donee organization reports all income from donated qualified intellectual property as income other than contributions (for example, royalty income from a patent).

The Nonprofit Sector in the United States: A Resource Guide

Add lines 1 through 24e and enter the totals on line 25 in columns (A), (B), (C), and (D). Purchases of goods or services from affiliates aren’t reported on line 21 but are reported as expenses in the usual manner. Enter certain types of payments to organizations affiliated with (closely related to) the filing organization.

Unless otherwise provided, includes the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, and the U.S. A public charity described in section 509(a)(1) or 509(a)(2) supported by a supporting organization described in section 509(a)(3). An organization, the primary function of which is the presentation of formal instruction, and which has a regular faculty, a curriculum, an enrolled body of students, and a place where educational activities are regularly conducted. Any contribution of a qualified real property interest to a qualified organization exclusively for conservation purposes. A “qualified real property interest” means any of the following interests in real property. Generally, include common and preferred stocks, bonds (including governmental obligations such as bonds and Treasury bills), mutual fund shares, and other investments listed and regularly traded in an over-the-counter market or an established exchange and for which market quotations are published or are otherwise readily available.

About Form 990-EZ, Short Form Return of Organization Exempt from Income Tax

These sources offer guidance on reading, understanding, and applying Form 990 data. Each resource includes information on what data is requested and collected by the IRS and where to find that data. There are also instructions for adding additional forms and responding to appended sections.

A disqualified person, regarding any transaction, is any person who was in a position to exercise substantial influence over the affairs of the applicable tax-exempt organization at any time during a 5-year period ending on the date of the transaction. Persons who hold certain powers, responsibilities, or interests are among those who are in a position to exercise substantial influence over the affairs of the organization. This would include, for example, voting members of the governing body, and persons holding the power of the following. Except as otherwise provided, a regional or district office of a tax-exempt organization must satisfy the same rules as the principal office for allowing public inspection and providing copies of its application for tax exemption and annual information returns. If the 5-year period ended within the organization’s tax year, the organization may treat the person as a disqualified person for the entire tax year.