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What Is IRS Form 990-N?

As we established in our Form 990 overview post, there are 5 versions of IRS Form 990, one or more of which is required to be filed annually by every 501(c) organization. Form 990-N, the shortest version and the one required to be filed by smaller nonprofits, is the focus of this conversation.

Description and Components

Form 990-N is the only version of the annual information return that isn’t really a form at all, but rather an online-only data filing.  In fact, it is referred to by the IRS as an e-Postcard.  Unlike its namesake, however, this postcard doesn’t have a picture of the beach.  What the IRS is looking for is:

  • The current legal name of the organization
  • Any trade names currently being used
  • Current mailing address
  • The nonprofit’s website address
  • Its Employer ID number (FEIN)
  • Name and address of a principal officer
  • The organization’s tax year (e.g., January 1, 20xx – December 31, 20xx, July 1, 20xx – June 30, 20xx, etc.)
  • Affirmation that the nonprofit’s gross receipts for the tax year just completed is normally under $50,000*
  • And, whether or not the nonprofit is still operating

The next-to-last bullet is the most important because it determines if the organization can even file Form 990-N (see below).  If gross receipts normally exceed $50,000, the nonprofit will have to prepare and file one of the longer versions.

History

Form 990-N is a relative newcomer to the world of IRS annual information returns, having first appeared in 2008 (for tax year 2007).  It is the result of sweeping changes to nonprofit tax law, passed by Congress as part of the Pension Protection Act of 2006.

Prior to the PPA legislation, small nonprofits (those under $25,000 in annual gross receipts) were not required to check-in with IRS at all.  They could operate year after year, and never report to Uncle Sam.  Obviously, they were still subject to nonprofit tax law, but with virtually no oversight.  The PPA changed that by requiring all 501(c) nonprofits to file the appropriate version of Form 990 every year.  990-N was created for those organizations with no prior filing requirement.  Starting in tax year 2010, the gross receipts threshold was increased to $50,000.

One more point is worth mentioning about the PPA.  Not only did it mandate that all 501(c) nonprofits must file Form 990 annually, but failure to do so for three consecutive years results in an automatic revocation of tax-exempt status.  The IRS made good on that promise, when on June 1, 2011, three years after the introduction of the new rules, approximately 275,000 nonprofits lost their 501(c) status in one day!  Since then, thousands more continue to lose status every year for failure to file their returns.

Form 990-N Filing Requirements

Like all versions of Form 990, Form 990-N is due on the 15th of the 5th month, following the end of the fiscal year.  Unlike the other formats, however, there is no paper version; it is online only.  If you use a professional service provider, like Foundation Group, to prepare the return, we will submit it directly to the IRS.

Normally Less Than $50,000 Is a Little Complicated

About that stipulation above…normally under $50,000 in gross receipts.  That is more complicated than it seems on the surface.  Here’s how the IRS defines it:

  • The nonprofit has been in existence for 1 year or less and received, or donors have pledged to give, $75,000 or less during its first taxable year;
  • Has been in existence between 1 and 3 years and averaged $60,000 or less in gross receipts during each of its first two tax years; and
  • Is at least 3 years old and averaged $50,000 or less in gross receipts for the immediately preceding 3 tax years (including the year for which calculations are being made).
We Can Help!

If you need assistance with Form 990-N, or any other version, be sure and let us know.  We’re here to help.

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Greg McRay, EA

Greg McRay, EA

Greg McRay is the founder and CEO of The Foundation Group. He is registered with the IRS as an Enrolled Agent and specializes in 501(c)(3) and other tax exemption issues.

This Post Has 8 Comments
  1. The IRS has archived the gross receipts normally $50,000 or less section. Do you know if the tax law changed regarding this?

    1. No, it’s still the same. But I did experience the same “archived” information notice on the IRS website. Very strange indeed, but the rule remains.

  2. Hi – our RV (small motorhome) social club has been operating without formal 501(c)(7) status, with less than $5000 income in membership dues annually, owns no property, and sells no services to non-members. The only other cash flow we have is collecting camping event fees in advance to secure group rates, which ends up as no additional income after event fees are paid. Our new treasurer would like to put the club funds in a club account, rather than a personal account. We’re wondering if we’ll need to “self-declare” our club with the IRS to get an EIN to open the account with, and then will we have to start filing a 990-N form annually – even though our income is less than $5000? And what about state requirements (if any) are applicable for a state version of 990-N? Note that our club is not state-centric in any way, so we wouldn’t even know where to start with that. Thanks for any insight you can provide!

    1. There are quite a few variables here, but I can give you my thoughts. If your revenue is going to remain under $5,000, and you are a wash financially each year, I probably would not bother formalizing an entity structure. The absence of assets amplifies this. You certainly wouldn’t be wrong to formalize, but there’s little upside. If you do keep operating through a “personal” bank account, make sure it is a separate account that isn’t co-mingled with someone’s personal funds. Keep everything separated and you should be fine.

      1. Greg – thanks for your thoughts on our club status – very helpful! I’m thinking there was a typo regarding a personal bank account; should say “If you do keep operating…”

    1. Hello, Salony. Reach out to our team at 615-361-9445. One of our team members can speak with you about your plans and how our services may be of help. We look forward to hearing from you.

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