New Form 990 Electronic Filing Requirements

As Georgia nonprofits and other tax-exempt entities return from the holidays, it’s time to settle in and get re-focused on managing various service programs and delivering needed assistance. While the last few months may have been focused on year-end financial reporting, tax planning and budget preparation for 2020, there was an important change made in 2019 impacting how nonprofits file their tax returns. In July 2019, President Trump signed the Taxpayer First Act (the Act), which mandates changes to update IRS policies to make it easier for taxpayers to receive information, submit filings and obtain improved service. While the focus on IRS modernization is the main theme, there was an update to an existing filing requirement that impacts nonprofit organizations. To help clients, prospects and others understand the change and evaluate the impact, Wilson Lewis has provided a summary of key points below.

New Electronic Filing Requirements

The Act requires all Form 990 returns to be electronically submitted for tax years beginning after July 1, 2019. This means that filers of IRS Form 990, 990-EZ, 990-PF, 990-N and form 1120-POL are no longer allowed to submit paper filings but need to submit all documentation using an IRS Authorized E-Filer Provider. The transition to electronic filing has been a popular option because of the immediacy of tax return receipt and acceptance.

Under prior regulations, IRS Form 990 needed to be filed electronically if reported gross receipts exceeded $10M and when 250 returns or more, were filed in a calendar year. This includes income, excise, employment tax, and other information returns. In addition, foundations and non-exempt charitable trusts were also required to file Forms 990-PF electronically (regardless of asset size), if they filed over 250 returns annually.

Transition Relief

There is some welcome news for certain small nonprofit and other organization for which electronic filing would create an undue hardship. For these organizations, they are required to begin submitting electronic filing on or after July 1, 2021. According to the IRS, a small organization is defined as one with gross receipts less than $200,000 and less than $500,000 in gross assets at the end of the tax year. It’s important to note there is similar relief available for Form 99-T filers.

Contact Us

The changes to the filing process are designed to ensure faster submission receipt and acceptance. However, many Atlanta nonprofits will need to revisit their filing process to ensure they follow the latest regulation change. If you have questions about electronic tax filing or need assistance with a nonprofit audit or tax issue, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.