IRS Form 990-EZ: Filing Instructions and Requirements

IRS Form 990-EZ is an annual information return for smaller tax-exempt organizations. Filing this form with the Internal Revenue Service (IRS) provides transparency regarding an organization’s finances, governance, and activities. This public disclosure allows the IRS to verify that the organization continues to meet its tax-exempt conditions and offers the public a window into the entity’s operations.

Determining Filing Requirements

An organization’s eligibility to use Form 990-EZ hinges on specific financial thresholds. The organization must have gross receipts of less than $200,000 for the tax year and total assets of less than $500,000 at the end of the tax year. Exceeding either one requires the organization to file the more comprehensive Form 990.

Form 990-EZ is an intermediate option between two other reports. Organizations with gross receipts of $50,000 or less can file Form 990-N, an electronic notice called the e-Postcard. Conversely, larger organizations with gross receipts of $200,000 or more, or total assets of $500,000 or more, must file the standard Form 990. Certain organizations, such as sponsoring organizations of donor-advised funds, must file Form 990 regardless of their financial size.

Information and Documentation Needed

Before preparing Form 990-EZ, an organization should compile a specific set of documents and data. The year-end financial statements, which include a detailed balance sheet and an income statement, provide the foundational numbers for the form.

A detailed breakdown of all revenue sources is necessary, separating funds into categories such as contributions, gifts, and grants; program service revenue; and other revenue streams like investment income. A categorized list of all expenses must also be prepared, breaking down expenditures into functional categories like program services, management and general, and fundraising costs.

The organization must also gather information about its people and programs. This includes a list of all officers, directors, trustees, and key employees, along with any compensation paid. The organization needs to prepare narrative descriptions of its three largest program service accomplishments, measured by expenses, including the associated revenues and expenses for each.

Completing the Form 990-EZ and Required Schedules

Part I, “Revenue, Expenses, and Changes in Net Assets or Fund Balances,” uses the categorized income and expense lists to create a financial summary. This section requires inputting specific revenue streams and functional expenses to calculate the year’s excess or deficit.

Part II of the form is the “Balance Sheets” section, which requires data from the organization’s year-end balance sheet. This part lists its assets, liabilities, and net assets at both the beginning and end of the tax year. Part III, the “Statement of Program Service Accomplishments,” is where the narrative descriptions of the organization’s main activities are entered, along with the corresponding expenses for each.

Certain answers on the Form 990-EZ may require the completion of additional schedules. Schedule A, “Public Charity Status and Public Support,” is required for organizations classified under section 501(c)(3) to demonstrate they meet the public support test. Schedule B, “Schedule of Contributors,” is required for most organizations, though donor information is not subject to public inspection for many. Schedule O, “Supplemental Information to Form 990 or 990-EZ,” is used to provide narrative explanations for various lines on the main form.

Filing Procedures and Deadlines

Most tax-exempt organizations are required to file their information returns electronically through an IRS Authorized e-file Provider. These are third-party software services that securely transmit the return to the IRS.

The filing deadline for Form 990-EZ is the 15th day of the 5th month after the organization’s accounting period ends. For an organization that uses the calendar year, the deadline is May 15 of the following year. If a due date falls on a weekend or legal holiday, the deadline moves to the next business day.

An organization can request an automatic six-month extension by filing Form 8868, “Application for Extension of Time To File an Exempt Organization Return,” on or before the original due date. This provides an additional six months to submit the return without incurring late-filing penalties.