The Revised Form 990

Update: IRS Releases Revised Form 990 Instructions, Background Documents
The Internal Revenue Service released revised instructions for the redesigned Form 990 on August 19, 2008, along with additional background documents to help nonprofits make the transition to the new form. As announced previously, adjustments were made in areas including: narrowing the definition of key employee; allowing reasonable efforts for obtaining information about interested or third parties in certain sections; and the standard for determining independence of board members. Clarifications were also made in reporting compensation, as well as business relationships and transactions with interested persons. The revised instructions also include the listing of countries according to nine geographic regions to be used for reporting activities outside the United States and a revised definition of hospital.

What Nonprofits Need to Know About the New Form 990
Though most nonprofit organizations have just finished filing their Form 990 for 2007, it is already time to start thinking about the new 990 you may be using next year.

Independent Sector is helping nonprofits do this work. We have posted on our website a guide, What Nonprofits Need to Know About the New Form 990 (PDF), and What Nonprofits Need to Know About the Form 990-EZ that outline some of the issues your organization should address before your tax year ends. IS also hosted a member conference call on the revised form on Thursday, July 17. Julie Floch, director of not-for-profit services at Eisner LLP; Frank H. Smith, senior tax manager with RAFFA, P.C.; and Pat Read, IS’s senior vice president of public policy, shared insights about what nonprofits should be thinking about to prepare for the new 990 and 990-EZ. Click Here to listen to the program. (IS Member Password Required)

The IRS is holding a free web broadcast on November 4, 2008 featuring IRS and tax-exempt sector experts who will explain the redesigned Form 990. You can register for the Preparing for the New Form 990 webcast on the Tax Talk Today website.

What Forms Should You File?
Your Organization Must File the New 990 in 2009 (for fiscal years beginning in 2008) if:

• You have annual receipts of $1 million or more, or total assets of $2.5 million or more.
• You maintain any donor advised funds.
• You are recognized as a tax-exempt organization under section 512(b)(13) (controlling organizations).

Private foundations (as described under section 509(a) of the tax code) file Form 990-PF. There have not yet been any changes to the Form 990-PF.

If your annual receipts are between $25,000 and $1,000,000, you may file the Form 990-EZ in 2009, although some states in which you are required to file a copy of your federal return may require that you file the full Form 990. 

If your annual receipts are under $25,000, you must file the new electronic postcard (Form 990-N).

These thresholds will change for returns filed in 2010 for fiscal years beginning in 2009.  At that time, public charities with annual receipts of $500,000 or more, or total assets of $1.25 million will be required to file the new 990.  The following year (2011), these thresholds drop to receipts of $200,000 and assets of $500,000.

Background on Redesign of the Form 990

Last updated: September 26, 2008