A change in the form 990 instructions for nonprofits filing in 2020 will require you to file your form 990 electronically. Previously, organizations have had the option to file physical or electronic returns for 990 and 990-EZ forms.
The online 990 filing requirement comes as part of a larger set of structural changes to the IRS under the “Taxpayer First Act.” Essentially, it’s aimed at improving your filing experience from top to bottom, as well as modernizing customer support and online experience, and strengthening security.
But what you really need to know first and foremost is how this new law will directly affect your filing and what actions you need to take as a financial officer.
Although some changes for IRS requirements are common from year to year, part of our mission at File 990 is to keep you informed and prepared to file with confidence.
With so much responsibility managing your nonprofit’s finances, it’s easy to get caught off guard and find yourself saying, “Wait, I Have to File Form 990 Electronically?”
That’s why we’re here to provide you all the crucial Updates to the New IRS Rules.
What Are the New Electronic 990 Filing Requirements?
According to the IRS, tax-exempt groups filing for a tax year beginning after July 1, 2019 must file the following forms electronically:
- Form 990, Return of Organization Exempt from Income Tax.
- Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation.
- Form 8872, Political Organization Report of Contributions and Expenditures.
- Form 1065, U.S. Return of Partnership Income (if filed by a Section 501(d) apostolic organization).
However . . .
If your organization experiences a short tax year or other specific circumstances covered in the 990 or 990-PF Instructions, you can still paper file with the IRS as they transition to a fully electronic filing system.
Form 990-EZ can be filed either via mail or electronically for an additional year. After this period you must file electronically.
Forms 990-T and 4720 are both required to be filed electronically under the new law, but physical forms will still be accepted while the IRS works to convert them to electronic format. They are expected to be electronic-only by the time you file for the 2020 tax year.
For apostolic groups who use form 1065, the e-filing rule will only apply to returns due on or after Oct. 15, 2020.
In addition, the IRS has this to say about pre-existing filings:
In effect, the legislation supersedes the pre-existing e-file regulation for large exempt organizations. Until tax years beginning after July 1, 2019, exempt organizations with total assets of $10 million or more at tax year-end that had filed 250 or more returns of any type during the calendar year were required to e-file Forms 990 and 990-PF. E-filing was also required of Form 8872 filers that had or expected more than $50,000 of contributions or expenditures in the calendar year. These prior rules will continue to apply to some e-filings made in 2020.
What Are the Current 990 Filing Requirements?
In case you’re new to 990 filing, or need a quick refresher, here’s the CliffsNotes version of the filing requirements.
The 990 Deadline
990 forms are due the 15th day of the 5th month following the end of the organization’s taxable year.
Use this IRS 990 filing timetable to figure out when your filing is due.
If you are filing a form other than a 990, those forms will have deadlines listed in their instructions as to filing due dates.
A Rundown of Common 990 Forms:
You file the digital only Form 990-N if your organization has gross receipts less than or equal to $50,000
You file the Form 990-EZ if your organization has gross receipts less than $200,000 and total assets less than $500,000.
You file the full Form 990 if your organization has gross receipts more than or equal to $200,000 or total assets more than or equal to $500,000.
How to File
Prior to the new law taking effect, 990-N is required to be submitted electronically, while 990 and 990-EZ can be submitted either physically or electronically.
Physical filings can be mailed to:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027.
What Is the Taxpayer First Act? Why Does It Matter to Nonprofits?
The Taxpayer First Act is aimed at making the IRS more “taxpayer-friendly.”
According to the IRS, the new law is meant “to expand and strengthen taxpayer rights and to reform the IRS into a more taxpayer friendly agency by requiring it to develop a comprehensive customer service strategy, modernize its technology and enhance its cyber security.”
It redesigns the IRS customer service model, including improved communications for appeals, misdirected tax-fund deposits, failure-to-file notices, alerts for identity theft and tax scams, and whistleblower investigations; codification of Volunteer Income Tax Assistance programs; publicly available educational materials; online and call-back services; and more.
It also bolsters cybersecurity and identity protection measures. The law requires the IRS to strengthen public-private relationships to better protect taxpayers’ identities; issue identity protection PINs to U.S. residents who request them; provide better protections against identity theft and avenues of communication and redress for those who suffer identity theft; and increase the penalty for taxpayer identity theft.
Additionally, it improves the internal structure of the IRS, from advocacy and oversight, to hiring and training practices, to the agency structure as a whole.
What’s the Value of Secure eFiling in a Digital World?
As the IRS continues to digitize and modernize the filing process for nonprofits, certified eFiler 990 has stayed ahead of the trend with secure and easy online 990-EZ and 990-N filing.
When filing online, a certified eFiler can help as a professional, streamlined, affordable service to ensure you meet your filing deadline every single year.
Here’s how File 990’s services will help your nonprofit:
- secure annual e-filing for 990-EZ and 990-N forms
- automated reminders when it’s time to file
- storage of data from previous years, to make filing easier
- optional enterprise suite to track and remind your multiple components or chapters to file
- a group filing option for 990-N forms.
Have questions about your 990 filing or want to learn more about our e-filing services? Call us at (859) 309-3641 or email firstname.lastname@example.org.