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Form 990-EZ Short Form Return of Organization Exempt From Income Tax cannot be used in certain situations. The following are examples when Form 990 Return of Organization Exempt From Income Tax must be utilized:

  • If Form 990, Part IX, Line 2 exceeds $5,000, Form 990 will be generated in the TaxAct program.
    Per IRS Instructions for Form 990 Return of Organization Exempt From Income Tax, on page 44:
    Line 2. Enter the amount paid by the organization to domestic individuals in the form of scholarships, fellowships, stipends, research grants, and similar payments and distributions.

    Also include grants and other assistance paid to third-party providers for the benefit of specified domestic individuals. For example, a grant payment to a hospital to cover the medical expenses of a specific patient must be reported on line 2. By comparison, a grant to the same hospital to provide services to the general public or to unspecified charity patients must be reported on line 1.

    If line 2 exceeds $5,000, the organization must complete Parts I and III of Schedule I (Form 990).
  • On Form 990, Part IV, Checklist of Required Schedules, if Line 11 is answered "Yes," Form 990 will be generated in the TaxAct program. This is because the information from Part X, Line 10 uses Schedule D (Form 990) Supplemental Financial Statements and Form 990, according to the Part X instructions for Line 10C.
    Per IRS Instructions for Form 990, on page 12:
    Line 11. Answer “Yes” if the organization reported an amount for land, buildings, equipment, or leasehold improvements, on Part X, line 10; an amount for other liabilities on Part X, line 25; or if its financial statements for the tax year included a footnote that addresses its liability for uncertain tax positions under FIN 48 (FASB ASC 740) (including a statement that the organization had no liability for uncertain tax positions). Also, answer “Yes” if the organization reported in Part X an amount for investments-other securities, investments-program related, or other assets, on any of line 12,13, or 15, that is 5% or more of the total assets reported on Part X, line 16.
  • On Form 990, Part X, Balance Sheet, Line 10a, if a cost is entered on this line, Form 990 will be generated in the TaxAct program. This will require the completion of Schedule D (Form 990) which can only be used with Form 990.
    Per IRS Instructions for Form 990, on page 48:
    Line 10a. Land, buildings, equipment, and leasehold improvements. Enter the cost or other basis of all land, buildings, equipment, and leasehold improvements held at the end of the year. Include both property held for investment purposes and property used for the organization's exempt functions. If an amount is reported here, answer “Yes” on Part IV, line 11a, and complete Schedule D (Form 990), Part VI. The amount reported on line 10a must equal the total of Schedule D, Part VI, columns (a) and (b).
  • If Gross receipts exceed $200,000, Form 990 will be generated in the TaxAct program.
    Per IRS Instructions for Form 990-EZ Short Form Return of Organization Exempt From Income Tax Under Section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except private foundations), on page 9:
    Item L. Determining Gross Receipts
    Add lines 5b, 6c, and 7b to line 9 to determine gross receipts. See Appendix B and Appendix C, later, for a discussion of gross receipts.

    Only those organizations with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of the tax year can use Form 990-EZ. If the organization doesn’t meet these requirements, it must file Form 990, unless excepted under General Instruction B, earlier.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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