What is Form 990-N?
Okay, let’s talk about taxes – but not the scary kind you might be thinking of! If you’re involved with a small nonprofit or tax-exempt organization, you might have heard of something called Form 990-N. Don’t worry, it’s not as complicated as it sounds. It’s basically a very simple, electronic “postcard” you send to the IRS each year.
This form, officially called the “Electronic Notice (e-Postcard) for Tax-Exempt Organizations,” is a way for these organizations to let the IRS know they’re still around and operating as a nonprofit. Think of it as a quick check-in to maintain your tax-exempt status.
Why Does Form 990-N Exist?
Before Form 990-N, even the smallest nonprofits had to file a more extensive tax return, which could be a hassle. The IRS created the 990-N to make things easier for these smaller groups. It’s a way to streamline the process for tax-exempt organizations that have limited financial activity while still maintaining basic oversight. This system ensures that organizations are not only tax-exempt, but also active and following the rules. It’s all about balance, making compliance simple while ensuring accountability.
Who Needs to File Form 990-N?
So, who needs to actually send in this e-Postcard? Here’s the main rule:
- Gross Receipts: Most tax-exempt organizations whose gross receipts are normally $50,000 or less must file Form 990-N.
Let’s break that down further:
* Tax-Exempt: We are talking about organizations that the IRS recognizes as tax-exempt. The most common one is an organization under section 501(c)(3) of the Internal Revenue Code (this is what most people think of when they hear “nonprofit”), but there are other tax-exempt types.
* Gross Receipts: This term refers to all the money your organization received before taking out any expenses. Think of it like your organization’s total revenue.
* Normally: This means the gross receipts for the current year, and the two prior years, were below the $50,000 threshold. If your gross receipts exceed this in any given year, you’ll likely need to file a Form 990 or 990-EZ, instead.
Not Everyone Files Form 990-N
There are a few exceptions. Here are some types of organizations that do NOT file Form 990-N:
* Organizations that are not 501(c) tax-exempt organizations.
* Organizations that are part of a group exemption (they are already covered).
* Organizations required to file Form 990 or 990-EZ.
* Organizations that are private foundations.
* Churches and their integrated auxiliaries, including conventions and associations of churches.
If your group falls into any of these categories, you don’t need to file Form 990-N. However, it’s important to confirm your specific requirements with the IRS or a tax professional, as rules can change.
What Information Is Needed on Form 990-N?
The good news is that Form 990-N is very simple to complete. It’s designed to be straightforward, with a limited number of questions. You’ll need to provide:
- Basic Identification Information: This includes your organization’s name, address, and employer identification number (EIN). Think of this as your organization’s social security number.
- Tax Year: You’ll specify which tax year this e-Postcard covers.
- Principal Officer Information: You’ll need to provide the name and address of one of your organization’s officers.
- Confirmation of $50,000 Gross Receipts or Less: This statement is to confirm your organization is eligible to file the 990-N.
- Website Information: If your organization has a website, you can add that information.
- Confirmation of Termination (if applicable): If you are terminating your operations, then that should be indicated in your filing.
That’s it! Seriously. It’s not complicated, which is why it’s often called the “e-Postcard.”
How Do I File Form 990-N?
You can only file Form 990-N electronically through the IRS website or an authorized e-file provider. It’s not possible to submit a paper copy. Here are the steps to take:
- Go to the IRS website: Navigate to the IRS’s “Electronic Filing System for Tax-Exempt Organizations” webpage.
- Find the Form 990-N Link: Select the link for Form 990-N.
- Enter Information: Carefully enter all of your required information. Double check your EIN!
- Submit: Review your information one more time, then submit your e-Postcard.
You’ll usually receive confirmation of successful filing right away. It is a good idea to save this confirmation of completion.
When Is Form 990-N Due?
Form 990-N is due on the 15th day of the fifth month following the close of your organization’s tax year. For example, if your tax year follows the calendar year (ends December 31st), your Form 990-N is due by May 15th of the following year. If your tax year ends June 30th, your Form 990-N is due by November 15th.
It’s good practice to file before the deadline!
What Happens if I Don’t File Form 990-N?
Failing to file Form 990-N for three consecutive years can have serious consequences. The IRS will automatically revoke your organization’s tax-exempt status. Reinstating it can be a long and complicated process. You definitely don’t want this to happen!
Even if you filed for a tax exemption originally, failure to comply with filing requirements can lead to the loss of that exemption.
Common Mistakes and Tips
- Missing the deadline: Set reminders! Make sure you’re aware of your filing deadline based on your organization’s fiscal year end.
- Incorrect EIN: Triple-check that you’re using the correct EIN.
- Assuming you don’t need to file: If you think you might be exempt from filing 990-N, double-check, because failure to file can result in tax problems down the line.
- Relying on outdated information: Stay informed about any changes in the tax rules.
- Double check the gross receipts amount: It can be confusing to determine this amount. If you have any questions, seek professional help.
- Keep your Records: Save your IRS confirmation for your records. It is also good practice to keep your annual tax information in a safe place.
- File Early: Don’t wait until the last minute! Filing early reduces the risk of missing the deadline.
Key Takeaway
Form 990-N is a crucial but straightforward way for small tax-exempt organizations to maintain their tax-exempt status with the IRS. By staying organized and filing on time, you can avoid potential issues and keep your organization running smoothly. Don’t let the idea of tax forms intimidate you! The Form 990-N process is designed to be quick and simple for small nonprofits. If you aren’t sure about something, seek professional assistance from a tax professional.
Related Terms
- Form 990: A more extensive annual information return required for larger tax-exempt organizations.
- Form 990-EZ: A simplified version of Form 990 for organizations with gross receipts under $200,000 and total assets under $500,000.
- Tax-Exempt Organization: An organization that is exempt from federal income tax, typically charities, foundations, and other nonprofits.
- Gross Receipts: The total revenue an organization receives before deducting expenses.
- EIN (Employer Identification Number): A unique identification number assigned by the IRS to businesses and tax-exempt organizations.