Just as individuals must file a tax return every year, a nonprofit must fill out and submit a special form to keep their nonprofit's exempt status. Fortunately, this is quite easy to do; small nonprofits can file Form 990-N in only a few minutes.
Learn more about Form 990-N, who should file it, and where you can find it.
What Is Form 990-N?
Form 990-N is a tax form used by nonprofits with annual revenue of less than $50,000. There were concerns that small nonprofits were operating under the radar. Since they did not have to file anything if their income was below the threshold, the government did not know if they had changed their address, their purpose, or even if they were still in business.
As part of the Pension Protection Act, passed in 2006, Congress made it mandatory that the IRS collect necessary information from all tax-exempt nonprofits. The result is the IRS Form 990-N.
- Alternate name: Electronic notice
- Alternate name: e-Postcard
Who Uses Form 990-N?
Today, all nonprofits with gross receipts under $50,000 must submit Form 990-N. If a nonprofit has fluctuating income from year to year, it should file the e-postcard if average revenues were $50,000 or less for the prior three consecutive years.
Where to get Form 990-N
You must access Form 990-N on the IRS's website; there is no paper version of the form.
What to Do If You Don't Receive Form 990-N
It's on you to go to the IRS website and fill out the form—nobody is going to send it to you. You can lose your tax exemption if you do not file, so take it seriously.
If you miss a single year, the IRS will send a reminder. However, if your organization fails to file for three consecutive tax years, you will lose tax-exempt status on the third year's due date. This revocation occurs automatically, and the IRS will not send any more notices.
A revocation means that your organization is no longer eligible for federal tax exemption and that you cannot promise your donors that their donations will be tax-deductible.
How to Fill Out and Read Form 990-N
It is simple to file the 990-N, but before you begin, you will need to create an account using your employer identification number (EIN). Besides that, you will need the following information:
- Tax year
- Legal name and mailing address
- Any other organization names
- Name and address of a principal officer
- Web site address
- Proof that the organization’s annual gross receipts are $50,000 or less
- If applicable, a statement that the organization has terminated or is going out of business
Can Form 990-N be E-Filed?
Yes, electronic submission is the only way Form 990-N can be filed.
How to File Form 990-N
You must file Form 990-N electronically on the IRS website. The form is due every year by the 15th day of the 5th month after the close of your tax year, and you can't file it until after your tax year ends. After filing the e-postcard, the IRS will send a notification, either accepting the form or rejecting it. If denied, there will be instructions on what to do next.
Criticism of Form 990-N
Since Form 990-N can only be filed electronically, there is a chance that technical issues could stop someone from being able to file the form in a timely manner. The IRS also suggests that the form not be filed with a smartphone, which hurts those who may not have access to a desktop computer or laptop. The IRS recommends that individuals who don't have access to a computer go to places that provide internet access to the public, like libraries.
- Form 990-N is used by nonprofits with an annual revenue below $50,000.
- Form 990-N can only be accessed online through the IRS website.
- There is no paper version of Form 990-N
- Nonprofits must file Form 990-N by the 15th day of the 5th month after the close of your tax year.