What is IRS Form 990-EZ?

Form 990-EZ is a shorter, more straightforward version of the IRS Form 990. Tax-exempt organizations recognized under Section 501(c) of the Internal Revenue Code are required to file this form annually. Organizations qualify to use Form 990-EZ if their gross receipts are below $200,000 and their total assets are under $500,000.

The 990-EZ short form is intended for small to medium-sized tax-exempt organizations, including specific NGOs and charities.

Why is filing Form 990-EZ important for nonprofit organizations?

Form 990-EZ is a legal requirement for organizations to keep their tax-exempt status. The 990-EZ return gives accurate information about the organization’s finances, operations, and governance to the public and the IRS.

Failure to file or late filing of the 990-EZ return may also result in penalties and the revocation of the organization’s tax-exempt status.

Step-by-step guide for Form 990-EZ Instructions

Item A- Enter the beginning and ending dates of the tax year

Item B- Check this box if applicable to your organization

• Address change
• Name change
• Initial return
• Final return/terminated
• Amended return
• Application pending 

Item C- Enter the name and address of the organization 

Item D- Enter the Employer Identification Number (EIN)

Item E- Enter the Telephone number

Item F- Enter the Group Exemption Number (GEN)

Item G- Enter the Accounting method(Cash, Accrual, or specify if others)

Item H- Check this box if the organization is not required to attach Schedule B (Form 990). 

Item I- Enter the website.

Item J- Check any one box for Tax-exempt status (501(c)(3) / 501(c), insert no. /4947(a)(1)/ 527) 

Item K- Check the form of organization (Corporation, Trust, Association, or Others)

Item L- Determine the gross receipts (If gross receipts exceed $200,000 or more, or if total assets of $500,000 or more at the end of the tax year, file Form 990 instead of Form 990-EZ)

Part- 1 Revenue, Expenses, and Changes in Net Assets or Fund Balances

Check the box if the organization used Schedule O to respond to any question in this Part I

Revenue part:

Line 1- Enter the Contributions, gifts, grants, and similar amounts received.

Line 2- Enter the Program service revenue including government fees and contracts.

Line 3- Enter the Membership dues and assessments.

Line 4- Enter the Investment Income.

Line 5-

• 5a: Gross amount from the sale of assets other than inventory
• 5b: Less: cost or other basis and sales expenses
• 5c: Gain or (loss) from sale of assets other than inventory (subtract line 5b from line 5a)

Line 6- Gaming and fundraising events:

• 6a: Gross income from gaming (attach Schedule G if greater than $15,000)
• 6b: Gross income from fundraising events  (attach Schedule G if the sum of such gross income and contributions exceeds $15,000)
• 6c: Less: direct expenses from gaming and fundraising events.
• 6d: Net income or (loss) from gaming and fundraising events (add lines 6a and 6b and subtract line 6c)

Line 7- 

• 7a: Gross sales of inventory, less returns and allowances
• 7b: Less: cost of goods sold
• 7c: Gross profit or (loss) from sales of inventory (subtract line 7b from line 7a)

Line 8- Other revenue (describe in Schedule O)

Line 9- Enter the Total revenue. Add lines 1, 2, 3, 4, 5c, 6d, 7c, and 8

Expenses Part:

Line 10- Grants and similar amounts paid (list in Schedule O)

Line 11- Benefits paid to or for members. 

Line 12- Salaries, other compensation, and employee benefits.

Line 13- Professional fees and other payments to independent contractors.

Line 14- Occupancy, rent, utilities, and maintenance.

Line 15- Printing, publications, postage, and shipping.

Line 16- Other expenses (describe in Schedule O)

Line 17- Enter the Total expenses. Add lines 10 through 16

Net Assets Part:

Line 18- Excess or (deficit) for the year (subtract line 17 from line 9)

Line 19- Net assets or fund balances at the beginning of the year (from line 27, column (A)) (must agree with the end-of-year figure reported on the prior year’s return) 

Line 20- Other changes in net assets or fund balances (explain in Schedule O)

Line 21- Net assets or fund balances at the end of the year. Combine lines 18 through 20

Part-2 Balance Sheet

Check the box if the organization used Schedule O to respond to any question in this Part II

Report the value at the beginning and end of the tax year for these lines.

Line 22- Enter the Cash, savings, and investments for the beginning and end of the year.

Line 23- Enter the Land and buildings

Line 24- Enter the Other assets (describe in Schedule O)

Line 25- Enter the Total assets.

Line 26- Enter the Total liabilities (describe in Schedule O)

Line 27- Enter the Net assets or fund balances (line 27 of column (B) must agree with line 21)

Part-3 Statement of Program Service Accomplishments

Check the box if the organization used Schedule O to respond to any question in this Part III

Enter the organization’s primary exempt purpose.

Line 28-30 – Give a detailed description of what the organization did to meet the needs of its three largest program services. And enter the expenses spent on lines 28a, 29a, and 30a respectively.

Line 31 – Enter the other program services.Line 32 – Enter the Total program service expenses (add lines 28a through 31a)

Part-4 List of Officers, Directors, Trustees, and Key Employees

Check if the organization used Schedule O to respond to any question in this Part IV

Column (a)- Enter the name and title.

Column (b)- Average hours per week devoted to position

Column (c)- Reportable compensation (Forms W-2/1099-MISC/ 1099-NEC) (if not paid, enter -0-)

Column (d)- Health benefits, contributions to employee benefit plans, and deferred compensation

Column (e)- Estimated amount of other compensation

Part-5 Other Information

Line 33- Select “Yes” if the organization did any significant new activities not reported to the IRS. Explain details in Schedule O.

Line 34- Select “Yes” if there were major changes to the organization’s governing documents. Attach a copy of the updated documents and describe the changes in Schedule O.

Line 35a-35b –Select “Yes” on 35a if the organization had $1,000 or more in unrelated business income from activities reported on lines 2, 6a, or 7a.

If 35a is “Yes” and you filed Form 990-T, select “Yes” on 35b. If not, select “No” and explain in Schedule O.

Line 35c – Select “Yes” if the organization (a 501(c)(4), (5), or (6)) is subject to lobbying tax rules under section 6033(e). Complete Schedule C, Part III.

If “No,” the organization certifies it wasn’t subject to these requirements and had no lobbying expenses subject to proxy tax.

Line 36 – Select “Yes” if the organization dissolved or transferred more than 25% of its assets during the year. Attach Schedule N if applicable.

Line 37- Enter the total amount of political spending (direct or indirect) on line 37a. This includes efforts to influence elections or appointments to public offices.

Line 38-Select “Yes” on 38a if any loans were made to or from key individuals, or if prior loans are still outstanding.

If “Yes,” complete Schedule L, Part II, and enter the total amount involved on line 38b.

Line 39- 

• 39a: Report any capital contributions, initiation fees, and unusual income not included in gross receipts for section 501(c)(7) clubs.
  
  
• 39b: Report gross receipts from public use of club facilities (non-members, their families, or guests).

Line 40-

• 40a: If the organization paid excise taxes for excess or disqualified lobbying or political expenditures, disclose them.
  
  
• 40b: Select “Yes” if the organization engaged in any excess benefit transactions (with a disqualified person). Complete Schedule L, Part I.
  
  
• 40c: Report any taxes imposed on organization managers or disqualified persons for excess benefit or political transactions.
  
  
• 40d: Enter the amount of taxes from 40c that the organization reimbursed. Reimbursements must be treated as compensation and considered reasonable.
  
  
• 40e: Select “Yes” if the organization was involved in any prohibited tax shelter transactions. Complete Form 8886-T and possibly Form 4720.
  
  

Line 41- List the states where a copy of this return is filed.

Line 42-

• 42a: Provide the name of the person who has the organization’s books and records.
  
  
•  42b: Select “Yes” if the organization had a foreign financial account exceeding $10,000 during the year, or if it owns more than 50% of a corporation with such accounts.
  

If “Yes,” list the foreign country or countries and file FinCEN Form 114 (FBAR) electronically.

Line 43 – Check the box if you’re a Section 4947(a)(1) nonexempt charitable trust filing Form 990-EZ instead of Form 1041. Enter the amount of tax-exempt interest earned.

Line 44a – Select “Yes” if the organization maintained any donor-advised funds during the year. If yes, file Form 990 instead of Form 990-EZ.

Line 44b – Select “Yes” if the organization operated any hospital facilities during the year. If yes, file Form 990 instead of Form 990-EZ.

Lines 44c and 44d – Select “Yes” in line 44c if the organization received payments for indoor tanning services. If “Yes” to line 44c, select “Yes” in line 44d if the organization filed Form 720 for these payments. If “No,” explain on Schedule O.

Line 45a – Select “Yes” if the organization had a controlled entity as defined by section 512(b)(13).

Line 45b – Select “Yes” if the organization received payments or engaged in transactions with a controlled entity. If “Yes,” file Form 990 and Schedule R instead of Form 990-EZ.

Line 46 – Select “Yes” if the organization participated in political campaign activities. If yes, complete Schedule C, Part I, and attach it to Form 990-EZ.

Part-6 Section 501(c)(3) Organizations Only

All section 501(c)(3) organizations must answer questions 47–49b and 52, and complete the tables for lines 50 and 51.

Line 47 – Select “Yes” if the organization engaged in lobbying or has a section 501(h) election. Complete Schedule C, Part II-A, whether or not lobbying occurred.

Line 48 – Select “Yes” if the organization qualifies as a school under section 170(b)(1)(A)(ii). Complete Schedule E (Schools).

Line 49 – Select “Yes” if the organization transferred anything of value (cash, assets, services, etc.) to a related exempt organization other than a 501(c)(3), such as a 501(c)(4) or 527 political organization.

Line 50 – If the organization has employees (not including officers, directors, trustees, or key employees) with annual compensation over $100,000, list the top five and complete the following:

• Column (a): Enter the employee’s name and title.
• Column (b): Estimate the average hours per week worked.
• Column (c): Report their compensation (from Forms W-2, 1099-MISC, or 1099-NEC).
• Column (d): List any health benefits, contributions to benefit plans, and deferred compensation.
• Column (e): Include any other estimated compensation.

Line 50f– Enter the number of other employees with compensation over $100,000 who weren’t listed individually.

Line 51 – If the organization paid independent contractors more than $100,000, list the top five. For each, complete:

• Column (a): Enter the contractor’s name and business address.
• Column (b): Describe the type of service provided.
• Column (c): Enter the total compensation paid to the contractor.

Line 51d– Report the number of other contractors receiving over $100,000 who are not listed individually.

Line 52 – Select “Yes” if the organization is a section 501(c)(3) and complete Schedule A (Public Charity Status and Public Support).

Signature 

Once you finish the return, it must be signed by one of the following authorized people: president, vice president, treasurer, assistant treasurer, chief accounting officer, or another corporate officer.

Paid Preparer

If a paid preparer helped with the return, they need to:

• Sign the return where indicated.
• Enter their Preparer Tax Identification Number (PTIN).
• Fill out the rest of the Paid Preparer Use Only section.
• Provide a copy of the return to the organization.

Why E-File Form 990-EZ with TaxZerone?

1. Stay Tax-Exempt with TaxZerone:

It is our mission to help non-profits achieve their goals effectively. TaxZerone ensures that your organization meets IRS criteria and maintains its tax-exempt status.

2. A Streamlined Process:

Filing taxes may be challenging, especially when dealing with complex forms. With TaxZerone’s user-friendly design and step-by-step instructions, e-filing your Form 990-EZ is simple. We’ve simplified the process so you can furnish the IRS with correct and comprehensive information, saving you time and stress.

3. Rapid IRS Acceptance Notification:

Waiting weeks to learn the status of your filing is a thing of the past. TaxZerone provides a speedy turnaround. You can expect to get your IRS acceptance notification within a few hours, allowing you to refocus your efforts on your non-profit’s primary objective.

4. Professional and Secure:

When dealing with sensitive financial and organizational data, security comes first. TaxZerone prioritizes security, guaranteeing that your information is kept safe during the e-filing procedure.

When is the deadline to file Form 990-EZ?

The deadline for filing IRS Form 990-EZ is the 15th day of the fifth month following the conclusion of the organization’s accounting period. If the due date falls on a Saturday, Sunday, or legal holiday, the organization must file Form 990-EZ by the next business day.

If your organization uses the calendar tax year, the deadline for filing the 990-EZ form is May 15.

Conclusion:

Finally, tax-exempt organizations may struggle with overcoming the complexities of IRS Form 990-EZ. However, with the complete assistance provided in this instruction guide, combined with TaxZerone’s rapid electronic filing services, the procedure becomes simpler and more accessible.

Organizations can use TaxZerone’s expertise to assure IRS compliance, maintain their tax-exempt status, and focus their efforts on furthering their purpose. With a commitment to professionalism, security, and fast processing, TaxZerone is the right partner for electronic filing needs, enabling NGOs to achieve their goals effectively and efficiently in the ever-changing regulatory compliance landscape.

Also read: How to E-file Form 990 with TaxZerone: A Non-profit’s Guide