Who must file a Form 990, and who doesn't

Tax exemption comes with an annual reporting duty. With few exceptions, an organization recognized as exempt under section 501(c) files a return in the Form 990 series every year, even a year in which it had no income at all. What changes with size is which return, not whether.

Who files

• Organizations exempt under section 501(c), including charities (501(c)(3)), social welfare organizations (501(c)(4)), labor and agricultural organizations (501(c)(5)), business leagues and trade associations (501(c)(6)), social clubs (501(c)(7)) and the rest of the 501(c) subsections. Our guide to 501(c)(4), (c)(6) and (c)(7) returns covers what is different for non-charities.
• Private foundations, which file Form 990-PF whatever their size.
• Section 527 political organizations, once gross receipts reach $25,000 (unless they are excepted, below).
• Section 4947(a)(1) nonexempt charitable trusts.

Which return, by size

Size decides the form. Gross receipts are everything the organization took in during the year from all sources, before subtracting any costs; see gross receipts explained.

A few organizations can't use the 990-N even when they are small. The most common is a section 509(a)(3) supporting organization (a charity organized to support one or more other public charities), which must generally file a 990 or 990-EZ. The full decision tree is in which Form 990 to file.

Who doesn't have to file a 990 or 990-EZ

The IRS excepts these organizations from the annual information return:

• Churches, interchurch organizations of local units of a church, conventions or associations of churches, and integrated auxiliaries of a church
• Church-affiliated organizations that only manage funds or run retirement programs
• Schools below college level affiliated with a church or operated by a religious order
• Church-affiliated mission societies if more than half of their activities are conducted in, or directed at people in, foreign countries
• The exclusively religious activities of a religious order
• State institutions whose income is excluded from tax under section 115
• Governmental units and their affiliates that meet the requirements of Rev. Proc. 95-48
• Section 501(c)(1) federal instrumentalities organized under an Act of Congress
• Certain political organizations: state or local party committees, candidate committees, caucuses or associations of state or local officials, and those that report to the Federal Election Commission
• Section 501(d) religious and apostolic organizations, which file Form 1065 instead
• Section 401 qualified plan trusts, which file Form 5500 instead
• Organizations included in a group return filed by their central organization

Private foundations and small organizations also don't file the 990 or 990-EZ, but only because they file the 990-PF or 990-N instead.

The church exceptions have limits. A supporting organization can use them only if it is itself an integrated auxiliary of a church or an exclusively religious activity of a religious order. A church may also choose to file, but if it does, it files a complete return. Form 990 for churches explains the edges of the exception.

How to check your own filing requirement

1. Confirm the organization's exempt status and subsection on its IRS determination letter, or search its EIN in the IRS Tax Exempt Organization Search.
2. Check the exception list above. If you rely on an exception, write down which one and why, and keep that note with your board records.
3. If no exception applies, work out gross receipts and assets for the year and choose the return.
4. Check for unrelated business income separately (see the 990-T section below).
5. Put the due date on the calendar: the 15th day of the 5th month after the year ends.

Group returns

A central organization with a group exemption letter may file one Form 990 covering two or more of its subordinates, if they are affiliated with it, under its general supervision, covered by the group exemption and on the same tax year. The group return can't be filed on a 990-EZ, uses its own employer identification number and reports the subordinates' combined figures. Each subordinate must authorize its inclusion in writing every year. If the central organization itself must file, it files its own separate return as well. A subordinate left out of the group return files its own 990, 990-EZ or 990-N.

The 990-T is a separate requirement

Any exempt organization, including a church or a government entity that is otherwise excused, must file Form 990-T if it has gross income of $1,000 or more from an unrelated trade or business: a business activity regularly carried on that isn't substantially related to its exempt purpose.

Common mistakes

• "We had no income, so we don't file." Zero-income organizations file the 990-N.
• "We never applied for exemption, so we're not on the hook." If the organization is treated as exempt, the requirement applies.
• Assuming a church-related nonprofit is a church. A separately incorporated ministry, camp or social-service agency may not fit any exception.
• Assuming the national office files for you. Confirm in writing that your chapter is included in the group return each year.

Why it matters

An organization that is required to file and doesn't, for three consecutive years, loses its exemption automatically, effective on the original due date of the third missed return. There is no warning letter first and no appeal. See automatic revocation.

990IRS.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.