IRS Form 990-N, What Is It & Which Nonprofits Can Use It?

Form 990-N, What Is It & Which Nonprofits Can Use It

All nonprofits that received a tax exemption letter from the Internal Revenue Service are required to file an informational return every year.   Depending on the size of the nonprofits revenue and assets files Form 990, Form 990-EZ or Form 990-N.  Foundations file Form 990-PF.

Nonprofits that fail to file with the IRS 3 years in a row will automatically lose their tax exemption.

Form 990-N can only be used by small nonprofits that average $50,000 or less in revenue a year.  It is an extremely easy form and takes only a few minutes to prepare and is submitted online through the IRS’  Form 990-N Electronic Filing System (e-Postcard)

Only 8 basic pieces of information are entered

  1. The nonprofit’s Employer Identification Number (EIN)
  2. Tax Year
  3. The legal name and mailing address of the nonprofit
  4. Any other names the organization uses
  5. Name and address of a principal officer
  6. Web site address
  7. Check a box, confirming that the annual gross receipts are $50,000 or less
  8. Check a Box if  the organization has gone out of business or is going out of business

That is it!  Here is a sample of a completed form.

Form 990-N Sample

It is an incredibly easy way to meet the IRS reporting requirements and maintain a nonprofit’s tax exemption status.

When Is Form 990-N Due

Form 990-N must be electronically filed with the IRS by 15th day of the 5th month after the nonprofits year-end.

For a nonprofit that has a year-end of December 31, 2017, Form 990-N should be filed by May 15, 2018.  For a nonprofit with a year-end of June 30, 2018,  the return is due by November 15, 2018.

There currently aren’t late fees for filing Form 990-N late.

Why Would A Small Nonprofit Choose to File Form 990 or Form 990-EZ

Form 990 and Form 990-EZ are both much more complicated returns and generally require the assistance of a tax preparer or accounting firm with experience with nonprofit tax.

A small nonprofit might chose to still invest the time and expense in having either of these returns prepared as they can be used as fundraising and marketing tools to foundations, corporations, sponsors and major donors.

Most foundation and corporate grant proposals require the submission of at least the last Form 990 or Form 990-EZ, especially if the organization does not have audited or reviewed financials.  Many funders require the last 3 years of 990s.

Form 990 and Form 990-EZ provide the opportunity in the Program Accomplishments Section on page 2 of the returns for the nonprofit to highlight all of the amazing work that is being done as well as all of the plans and dreams of the future.  If there isn’t enough room on page 2 you can give even more details in Section O of the return.

Form 990 and Form 990-EZ could function as one of the most important and critical pieces of marketing collateral for a small nonprofit with intentions of growth.