IRS releases new nonprofit tax return, Form 990

Threshholds for reporting raised; smaller nonprofits
can use Form 990-EZ during transition to new form

On Dec. 20, the Internal Revenue Service released the newly revised Form 990. The new document format features a core form and a series of schedules. It provides more opportunities for the organization to explain its activities and makes major changes to the summary page, governance section and schedules.

“Other major changes were made to the form’s summary page, governance section, and various schedules, including those relating to executive compensation, related organizations, foreign activities, hospitals, non-cash contributions and tax exempt bonds.  A checklist of schedules was also added,” said the IRS in a news release.

The IRS also announced a graduated transition period for smaller nonprofits, which will be allowed to file the Form 990-EZ instead of the Form 990. For the 2008 tax year returns that are filed in 2009, organizations with gross receipts over $1 million or total assets over $2.5 million will be required to file the Form 990. 

For the 2009 tax year returns that are filed in 2010, organizations with gross receipts over $500,000 or total assets over $1.25 million will be required to file the new Form 990. “We believe the transition relief we are providing is appropriate and meaningful, and will ease the concerns raised by commenters,” said Lois G. Lerner, director of  IRS Exempt Organizations.

“The filing thresholds will be set permanently at $200,000 gross receipts and $500,000 total assets beginning with the 2010 tax year,” the IRS said.  “Also, starting with the 2010 tax year, the IRS will increase the filing threshold for organizations required to file Form 990-N (the e-postcard) from $25,000 to $50,000.”

The Form 990 redesign is the first in decades and follows a public comment period that led to several significant changes from the IRS’s draft of the new form. HANO and other state association members of the National Council of Nonprofit Association contributed comments. For further information on the redesign effort and the new forms, visit the IRS website.