Almost all tax-exempt organizations such as charities and nonprofits need to submit an Annual Exempt Organization Return. These tax-exempt organizations report their financial activities and compliance status to the IRS to keep their federal tax-exempt status.
Depending on the size and annual gross receipts, organizations can file Form 990, Form 990-EZ, or Form 990-N (e-Postcard).
Who Must File an Annual Exempt Organization Return?
Most organizations recognized as tax-exempt under Section 501(c) of the Internal Revenue Code must file an annual return, including:
- Charitable and religious organizations
- Educational and scientific institutions
- Social welfare groups and business leagues
- Private foundations (which use Form 990-PF)
Exceptions: Certain religious institutions, subsidiaries, and government-affiliated entities may be exempt from filing. Always verify eligibility before skipping a return.
What Forms Are Used for the Annual Exempt Organization Return?
Here’s a breakdown of the main IRS forms used:
| Form | Filing Threshold | Description |
| Form 990-N | Gross receipts ≤ $50,000 | Electronic postcard for small nonprofits |
| Form 990-EZ | Gross receipts < $200,000 and total assets < $500,000 | Shorter version of Form 990 |
| Form 990 | Gross receipts ≥ $200,000 or total assets ≥ $500,000 | Full annual return |
| Form 990-PF | Required for all private foundations | Reports assets, grants, and expenses |
When Is the Annual Exempt Organization Return Due?
The return is due on the 15th day of the 5th month after the end of the organization’s accounting period.
For example:
- If your fiscal year ends on December 31, your return is due May 15 of the following year.
- If your fiscal year ends on June 30, your filing deadline would be November 15.
This timeline applies regardless of whether your organization uses a calendar or fiscal year. The IRS counts from the close of your accounting period, so it’s essential to confirm your organization’s fiscal year-end before calculating the due date.
If you need additional time, you can request a six-month automatic extension by filing Form 8868 before the original due date. Filing this form on time grants your nonprofit an extended deadline—no explanation is required. However, keep in mind that the extension only delays the filing of the return, not the payment of any unrelated business income tax that may be owed.
What Happens If a Nonprofit Fails to File?
Failure to file the required return for three consecutive years results in automatic revocation of tax-exempt status. The organization will then be subject to income tax and must reapply with the IRS to regain exemption.
Other penalties may include:
- Daily fines for late filing
- Increased IRS scrutiny during reinstatement
- Loss of donor confidence and grant eligibility
How to File the Annual Exempt Organization Return
The following steps will help ensure that you do a complete and compliant filing:
- Decide which filing form you will use based on your gross receipts and assets and the relevant thresholds.
- Collect the necessary financial statements, the directory of your board, and your mission updates.
- File digitally using the IRS approved e-file systems. All returns must be e-filed using IRS sanctioned e-file systems for exempt organizations.
- Final check for accuracy as mistakes will delay acceptance. Pay careful attention to the financial totals, the EIN and the names of the officers.
- To sustain your organization’s transparency, maintain copies. For audits and internal accountability, you should keep a complete file of your return and all documentation for a three-year period.
If your organization uses an outside accountant or tax advisor, make sure to connect with them early on so all documents get finalized before filing season. This can help avoid unfiled documents and minimize the risk of noncompliance.
Why This Return Matters
Having an Annual Exempt Organization Return shows how accountable an organization is. It lets donors, grantors, and the general public understand how nonprofits utilize funds. Lastly, and most importantly, it maintains the organization’s IRS tax-exempt status, which is fundamental to the organization’s tax-exempt status financial sustainability.
Need Help Filing Your Annual Exempt Organization Return?
To keep your nonprofit in good standing, you have to fill out Form 990 properly. For all types of nonprofits, whether you need full prep service or just need a compliance review, Dimov Tax gives expert advice.
We will make sure your Annual Exempt Organization Return is correct, compliant, and filed on time. Get in touch with us today.
FAQ
Do nonprofits have to file 990 every year?
Yes—most tax-exempt orgs must file a Form 990-series return annually (or file Form 8868 for a 6-month extension).
What is a 990 return of organization exempt?
The IRS’s annual information return (990/990-EZ/990-N) reporting a nonprofit’s finances, governance, and activities to maintain exemption.
Do tax-exempt organizations have to file taxes?
They must file the 990-series each year and pay tax on unrelated business income via Form 990-T, if applicable.
How do I report a tax-exempt organization to the IRS?
Submit IRS Form 13909 (Tax-Exempt Organization Complaint) to report suspected noncompliance.