Blank IRS 990-T Template

The IRS 990-T form is a tax document that nonprofit organizations use to report income from activities unrelated to their exempt purposes. This form helps ensure transparency and compliance with federal tax laws while maintaining the integrity of the nonprofit sector. To understand your obligations and complete this important filing, consider filling out the form by clicking the button below.

Article Guide

The IRS 990-T form plays a critical role for nonprofit organizations as it relates to their tax obligations on unrelated business income. Nonprofits typically operate to further charitable, educational, or religious purposes, yet they may engage in income-generating activities that do not directly align with their primary mission. In such cases, the 990-T form must be filed if the organization earns $1,000 or more in gross income from these unrelated business activities. This form serves to report that income and calculate the applicable taxes, thus ensuring compliance with federal tax laws. It also provides essential insights into the financial activities of nonprofits, offering a glimpse into their ability to sustain operations outside of their traditional fundraising efforts. Additionally, understanding the nuances of deductions available on the form can help organizations minimize their tax liabilities and maximize resources for their charitable missions. The filing requirements, along with deadlines, present important considerations for nonprofits aiming to maintain their tax-exempt status while engaging in ancillary business activities.

Form Sample

Note: The form, instructions, or publication you are looking

for begins after this coversheet.

Please review the updated information below.

Reporting a Refundable Minimum Tax Credit on a 2018 or 2019 Form

990-T

A corporate 990-T filer who is completing Form 8827 and claiming a refundable minimum tax credit (line 5c (2019) or 8c (2018) of Form 8827) should report the credit on Form 990-T as follows.

•On a 2018 Form 990-T, report the credit on line 50g, Other credits, adjustments, and payments. Check the “Other” box. Enter “F8827” and the amount of the credit.

•On a 2019 Form 990-T, report the credit on line 51g, Other credits, adjustments, and payments. Check the “Other” box. Enter “F8827” and the amount of the credit.

Form 990-T

Exempt Organization Business Income Tax Return

OMB No. 1545-0047

(and proxy tax under section 6033(e))

2019

For calendar year 2019 or other tax year beginning

, 2019, and ending

, 20

Department of the Treasury

Go to www.irs.gov/Form990T for instructions and the latest information.

Open to Public Inspection for

Internal Revenue Service

Do not enter SSN numbers on this form as it may be made public if your organization is a 501(c)(3).

501(c)(3) Organizations Only

Check box if

Name of organization (

Check box if name changed and see instructions.)

D Employer identification number

address changed

(Employees’ trust, see instructions.)

B Exempt under section

501(

) (

)

Number, street, and room or suite no. If a P.O. box, see instructions.

408(e)

220(e)

E Unrelated business activity code

Type

(See instructions.)

408A

530(a)

City or town, state or province, country, and ZIP or foreign postal code

529(a)

C Book value of all assets

Group exemption number (See instructions.)

at end of year

Check organization type

501(c) corporation

501(c) trust

401(a) trust

Other trust

H Enter the number

of the organization’s unrelated trades or businesses.

Describe the only (or first) unrelated

trade or business here

. If only one, complete Parts I–V. If more than one, describe the

first in the blank space at the end of the previous sentence, complete Parts I and II, complete a Schedule M for each additional

trade or business, then complete Parts III–V.

IDuring the tax year, was the corporation a subsidiary in an affiliated group or a parent-subsidiary controlled group? . . If “Yes,” enter the name and identifying number of the parent corporation.

Yes


J The books are in care of					Telephone number
Part	I	Unrelated Trade or Business Income			(A) Income	(B) Expenses	(C) Net
1a	Gross receipts or sales . .
b	Less returns and allowances		c Balance	1c
2	Cost of goods sold (Schedule A, line 7)			2
3	Gross profit. Subtract line 2 from line 1c			3
4a	Capital gain net income (attach Schedule D)			4a
b	Net gain (loss) (Form 4797, Part II, line 17) (attach Form 4797) .			4b
c	Capital loss deduction for trusts			4c
5	Income (loss) from a partnership or an S corporation (attach
	statement)			5
6	Rent income (Schedule C)			6
7	Unrelated debt-financed income (Schedule E)			7
8	Interest, annuities, royalties, and rents from a controlled organization (Schedule F)			8
9	Investment income of a section 501(c)(7), (9), or (17) organization (Schedule G)			9
10	Exploited exempt activity income (Schedule I)			10
11	Advertising income (Schedule J)			11
12	Other income (See instructions; attach schedule)			12
13	Total. Combine lines 3 through 12			13

Part II Deductions Not Taken Elsewhere (See instructions for limitations on deductions.) (Deductions must be directly connected with the unrelated business income.)

14	Compensation of officers, directors, and trustees (Schedule K)		14
15	Salaries and wages		15
16	Repairs and maintenance		16
17	Bad debts		17
18	Interest (attach schedule) (see instructions)		18
19	Taxes and licenses		19
20	Depreciation (attach Form 4562)	20
21	Less depreciation claimed on Schedule A and elsewhere on return . . . .	21a	21b
22	Depletion		22
23	Contributions to deferred compensation plans		23
24	Employee benefit programs		24
25	Excess exempt expenses (Schedule I)		25
26	Excess readership costs (Schedule J)		26
27	Other deductions (attach schedule)		27
28	Total deductions. Add lines 14 through 27		28
29	Unrelated business taxable income before net operating loss deduction. Subtract line 28 from line 13		29
30	Deduction for net operating loss arising in tax years beginning on or after January 1, 2018 (see
	instructions)		30
31	Unrelated business taxable income. Subtract line 30 from line 29		31

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 11291J

Form 990-T (2019)

Form 990-T (2019)		Page 2
Part III	Total Unrelated Business Taxable Income

32Total of unrelated business taxable income computed from all unrelated trades or businesses (see

	instructions)
33	Amounts paid for disallowed fringes
34	Charitable contributions (see instructions for limitation rules)

35Total unrelated business taxable income before pre-2018 NOLs and specific deduction. Subtract line

34 from the sum of lines 32 and 33 . . . . . . . . . . . . . . . . . . . . . .

36Deduction for net operating loss arising in tax years beginning before January 1, 2018 (see

	instructions)
37	Total of unrelated business taxable income before specific deduction. Subtract line 36 from line 35 .
38	Specific deduction (Generally $1,000, but see line 38 instructions for exceptions)

39Unrelated business taxable income. Subtract line 38 from line 37. If line 38 is greater than line 37, enter the smaller of zero or line 37 . . . . . . . . . . . . . . . . . . . . . . .

Part IV Tax Computation

40	Organizations Taxable as Corporations. Multiply line 39 by 21% (0.21)
41	Trusts Taxable at Trust	Rates. See instructions	for tax computation. Income tax on
	the amount on line 39 from:	Tax rate schedule or	Schedule D (Form 1041)
42	Proxy tax. See instructions
43	Alternative minimum tax (trusts only)
44	Tax on Noncompliant Facility Income. See instructions
45	Total. Add lines 42, 43, and 44 to line 40 or 41, whichever applies

Part V Tax and Payments

46a	Foreign tax credit (corporations attach Form 1118; trusts attach Form 1116) .	46a
b	Other credits (see instructions)	46b
c	General business credit. Attach Form 3800 (see instructions)	46c
d	Credit for prior year minimum tax (attach Form 8801 or 8827)	46d

e	Total credits. Add lines 46a through 46d
47	Subtract line 46e from line 45
48	Other taxes. Check if from:	Form 4255	Form 8611	Form 8697	Form 8866	Other (attach schedule)
49	Total tax. Add lines 47 and 48 (see instructions)

502019 net 965 tax liability paid from Form 965-A or Form 965-B, Part II, column (k), line 3 . . . . .


51a	Payments: A 2018 overpayment credited to 2019				51a
b	2019 estimated tax payments				51b
c	Tax deposited with Form 8868				51c
d	Foreign organizations: Tax paid or withheld at source (see instructions) . .				51d
e	Backup withholding (see instructions)				51e
f	Credit for small employer health insurance premiums (attach Form 8941) . .				51f
g	Other credits, adjustments, and payments:		Form 2439
	Form 4136	Other		Total	51g
52	Total payments. Add lines 51a through 51g
53	Estimated tax penalty (see instructions). Check if Form 2220 is attached
54	Tax due. If line 52 is less than the total of lines 49, 50, and 53, enter amount owed

55Overpayment. If line 52 is larger than the total of lines 49, 50, and 53, enter amount overpaid . .

56 Enter the amount of line 55 you want: Credited to 2020 estimated tax

Refunded

46e

Part VI Statements Regarding Certain Activities and Other Information (see instructions)

57At any time during the 2019 calendar year, did the organization have an interest in or a signature or other authority over a financial account (bank, securities, or other) in a foreign country? If “Yes,” the organization may have to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts. If “Yes,” enter the name of the foreign country here

58During the tax year, did the organization receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? .

If “Yes,” see instructions for other forms the organization may have to file.
59 Enter the amount of tax-exempt interest received or accrued during the tax year	$

Yes No

Sign Here

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

F			F		May the IRS discuss this return
					May the IRS discuss this return
					with the preparer shown below
					(see instructions)? Yes No
	Signature of officer	Date		Title

Paid	Print/Type preparer’s name	Preparer’s signature	Date	Check	if	PTIN
Paid				Check	if
Preparer				self-employed

	Firm’s name			Firm’s EIN
Use Only	Firm’s name			Firm’s EIN
Use Only	Firm’s address			Phone no.
	Firm’s address			Phone no.

Form 990-T (2019)

Form 990-T (2019)	Page 3
Schedule A—Cost of Goods Sold. Enter method of inventory valuation

1Inventory at beginning of year

Purchases

3Cost of labor . . . . . .

4a Additional section 263A costs

(attach schedule) . . . .

bOther costs (attach schedule)

5 Total. Add lines 1 through 4b

6 Inventory at end of year . . . .

7Cost of goods sold. Subtract line 6 from line 5. Enter here and in Part

I, line 2

8Do the rules of section 263A (with respect to Yes No

property produced or acquired for resale) apply to the organization? . . . . . . . . .

Schedule C—Rent Income (From Real Property and Personal Property Leased With Real Property)

(see instructions)

1.Description of property

(1)

(2)

(3)

(4)

2.Rent received or accrued

(a) From personal property (if the percentage of rent		(b) From real and personal property (if the				3(a) Deductions directly connected with the income
for personal property is more than 10% but not		percentage of rent for personal property exceeds				in columns 2(a) and 2(b) (attach schedule)
more than 50%)		50% or if the rent is based on profit or income)

(1)
(2)
(3)
(4)
Total		Total				(b) Total deductions.
(c) Total income. Add totals of columns 2(a) and 2(b). Enter						(b) Total deductions.
						Enter here and on page 1,
here and on page 1, Part I, line 6, column (A) . . .						Part I, line 6, column (B)
Schedule E—Unrelated Debt-Financed Income (see instructions)
			2. Gross income from or			3. Deductions directly connected with or allocable to
1. Description of debt-financed property			2. Gross income from or			debt-financed property
			allocable to debt-financed			debt-financed property
			allocable to debt-financed
			property		(a) Straight line depreciation		(b) Other deductions
			property			(attach schedule)	(attach schedule)
						(attach schedule)	(attach schedule)

(1)
(2)
(3)
(4)
4. Amount of average	5. Average adjusted basis		6. Column			7. Gross income reportable	8. Allocable deductions
acquisition debt on or	of or allocable to		6. Column				8. Allocable deductions
acquisition debt on or	of or allocable to		4 divided				(column 6 × total of columns
allocable to debt-financed	debt-financed property		4 divided			(column 2 × column 6)	(column 6 × total of columns
allocable to debt-financed	debt-financed property		by column 5			(column 2 × column 6)	3(a) and 3(b))
property (attach schedule)	(attach schedule)		by column 5				3(a) and 3(b))
property (attach schedule)	(attach schedule)

(1)				%
(2)				%
(3)				%
(4)				%
					Enter here and on page 1,		Enter here and on page 1,
					Part I, line 7, column (A).		Part I, line 7, column (B).
Totals
Total dividends-received deductions included in column 8
							Form 990-T (2019)

Form 990-T (2019)					Page 4
Schedule F—Interest, Annuities, Royalties, and Rents From Controlled Organizations (see instructions)
		Exempt Controlled Organizations
1. Name of controlled	2. Employer		4. Total of specified	5. Part of column 4 that is	6. Deductions directly
organization	identification number 3. Net unrelated income		4. Total of specified	included in the controlling	connected with income
		(loss) (see instructions)	payments made	included in the controlling	connected with income
		(loss) (see instructions)	payments made	organization’s gross income	in column 5
				organization’s gross income	in column 5

(1)
(2)
(3)

(4)

Nonexempt Controlled Organizations

7.	Taxable Income	8. Net unrelated income	9.	Total of specified	10. Part of column 9 that is	11. Deductions directly
					included in the controlling	connected with income in
		(loss) (see instructions)	payments made
					organization’s gross income	column 10

(1)

(2)

(3)

(4)

Add columns 5 and 10.	Add columns 6 and 11.
Enter here and on page 1,	Enter here and on page 1,
Part I, line 8, column (A).	Part I, line 8, column (B).

Totals . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule G—Investment Income of a Section 501(c)(7), (9), or (17) Organization (see instructions)

1. Description of income	2. Amount of income	3. Deductions	4.	Set-asides	5. Total deductions
		directly connected	4.	Set-asides	and set-asides (col. 3
		directly connected	(attach schedule)		and set-asides (col. 3
		(attach schedule)	(attach schedule)		plus col. 4)
		(attach schedule)			plus col. 4)

(1)
(2)
(3)
(4)
	Enter here and on page 1,				Enter here and on page 1,
	Part I, line 9, column (A).				Part I, line 9, column (B).

Totals . . . . . . . .

Schedule I—Exploited Exempt Activity Income, Other Than Advertising Income (see instructions)

	2. Gross	3. Expenses	4. Net income (loss)	5. Gross income			7. Excess exempt
		directly	from unrelated trade		6.	Expenses	expenses
	unrelated
1. Description of exploited activity		connected with	or business (column	from activity that			(column 6 minus
	business income				attributable to
		production of	2 minus column 3).	is not unrelated			column 5, but not
	from trade or				column 5
		unrelated	If a gain, compute	business income			more than
	business
		business income	cols. 5 through 7.				column 4).

(1)

(2)

(3)

(4)

Enter here and on	Enter here and on	Enter here and
page 1, Part I,	page 1, Part I,	on page 1,
line 10, col. (A).	line 10, col. (B).	Part II, line 25.

Totals . . . . . . . .

Schedule J—Advertising Income (see instructions)

Part I Income From Periodicals Reported on a Consolidated Basis

	2. Gross			4. Advertising				7. Excess readership
1. Name of periodical		3.	Direct	gain or (loss) (col.	5. Circulation	6.	Readership	costs (column 6
	advertising			2 minus col. 3). If				minus column 5, but
		advertising costs			income		costs
	income			a gain, compute				not more than

				cols. 5 through 7.				column 4).

(1)

(2)

(3)

(4)

Totals (carry to Part II, line (5))

Form 990-T (2019)

Page 5

Part II Income From Periodicals Reported on a Separate Basis (For each periodical listed in Part II, fill in columns

2 through 7 on a line-by-line basis.)

2. Gross

4. Advertising

7. Excess readership

1. Name of periodical

3. Direct

gain or (loss) (col.

5. Circulation

Readership

costs (column 6

advertising

2 minus col. 3). If

minus column 5, but

advertising costs

income

costs

income

a gain, compute

not more than

cols. 5 through 7.

column 4).

(1)

(2)

(3)

(4)

Totals from Part I.

. . . . .

Enter here and on

Enter here and

page 1, Part I,

on page 1,

line 11, col. (A).

line 11, col. (B).

Part II, line 26.

Totals, Part II (lines 1–5) . . . .

Schedule K—Compensation of

Officers, Directors, and Trustees (see instructions)

1. Name

2. Title

3. Percent of

4. Compensation attributable to

time devoted to

unrelated business

business

(1)

(2)

(3)

(4)

Total. Enter here and on page 1, Part II, line 14

Form 990-T (2019)

⇩ PDF

Document Specifications

Fact Name	Description
Purpose	The IRS Form 990-T is used by exempt organizations to report unrelated business income and calculate tax owed on that income.
Who Must File	Exempt organizations, including charities and non-profits, need to file this form if they have earned income from a trade or business that is not substantially related to their exempt purpose.
Filing Deadline	This form is typically due on the 15th day of the 5th month after the end of the organization's tax year. Extensions can be requested.
State Variations	Many states have their own versions of the 990-T form, and they may be governed by state laws specific to non-profit organizations. Check local regulations.
Penalties	Failure to file Form 990-T or inaccuracies in reporting may result in penalties, which can significantly impact the organization’s finances.

Steps to Filling Out IRS 990-T

Filling out the IRS 990-T form is an important task that requires careful attention to detail. Gather all relevant financial information and documents beforehand to streamline the process. Make sure you set aside adequate time to complete each section thoughtfully.

Start by obtaining the IRS 990-T form from the IRS website or through your tax preparer. Ensure you have the most recent version of the form.
At the top of the form, clearly indicate the name of your organization as it appears in your records, along with its Employer Identification Number (EIN).
Enter your organization’s address and the tax year for which you are filing.
Provide information regarding your organization’s principal activity. Describe what your organization primarily does.
Carefully list any unrelated business income your organization earned during the tax year, including the sources of that income.
Calculate your total unrelated business taxable income (UBTI) by summing all the amounts from your income sources, as specified in the form.
Determine your deductions by listing any related expenses that can be subtracted from the UBTI.
Fill out the tax calculation section to determine the amount of tax owed, if any. This involves applying the appropriate tax rate to the UBTI after deductions.
Complete the signature section, ensuring that it is signed by an authorized individual, such as an officer of the organization.
Review the entire form for accuracy and completeness. Double-check all calculations and ensure that all required fields are filled.
File the completed form by the due date, either by mailing it to the appropriate IRS address or by submitting it electronically, if permitted.

Once you have submitted the form, be sure to maintain copies for your records. Staying organized with your documentation will support future filings and inquiries. If necessary, consult with a tax professional for any clarification regarding your submission or ongoing compliance obligations.

More About IRS 990-T

What is the IRS 990-T form?

The IRS 990-T form is used by tax-exempt organizations to report and pay taxes on unrelated business income (UBI). If an organization engages in a business activity unrelated to its primary purpose and generates revenue from it, the 990-T form must be filed. This ensures that the organization pays tax on income that is not related to its exempt status.

When is the IRS 990-T form due?

The IRS 990-T form is typically due on the 15th day of the 5th month after the end of the organization’s tax year. For organizations whose tax year ends on December 31, the due date would be May 15 of the following year. If forms are not filed by the deadline, organizations may incur penalties.

Who must file IRS 990-T?

Tax-exempt organizations, including charities and non-profits, must file the 990-T form if they earn $1,000 or more in unrelated business income. This applies to organizations structured under various sections of the Internal Revenue Code, including 501(c)(3) organizations.

What types of income are considered unrelated business income?

Unrelated business income generally includes revenue from activities that do not directly relate to an organization’s exempt purpose. Examples include income from a gift shop, parking fees, or advertising revenue. However, income from volunteer-led activities or activities directly tied to the organization's mission may not be classified as unrelated business income.

What happens if the IRS 990-T form is not filed?

If an organization fails to file the IRS 990-T form when required, it may face substantial penalties. These can include fines based on the amount of unpaid tax and may also jeopardize the organization’s tax-exempt status. Maintaining compliance is crucial for preserving the benefits associated with tax exemption.

Can organizations get help completing the IRS 990-T form?

Yes, organizations can seek assistance from tax professionals or accountants who are familiar with IRS requirements. Additionally, the IRS provides guidance on completing the form, including detailed instructions. Utilizing these resources can help ensure accurate and timely filing of the 990-T.

Common mistakes

Incorrect Entity Status: Some organizations fail to confirm their entity status before filling out the form. It's crucial to ensure that the IRS recognizes your organization as a tax-exempt entity.
Failure to Report All Income: Neglecting to include all sources of unrelated business income can lead to serious issues. Comprehensive reporting is necessary to avoid penalties.
Wrong Classification of Activities: Misclassifying the nature of the business activities can impact tax obligations. Clear definitions are essential for accurate reporting.
Omitting Expenses: Not claiming all allowable expenses related to the unrelated business income can increase taxable income inaccurately. Always itemize all relevant expenses.
Inaccurate or Missing Basic Information: Errors in basic details like name, address, or Employer Identification Number (EIN) can cause processing delays or rejections.
Ignoring Deadlines: Submitting the 990-T form after the due date may result in penalties. Pay attention to deadlines to stay compliant.
Neglecting to Sign the Form: A common oversight is forgetting to sign the form. Ensure that it's signed by an authorized person before submission.
Not Keeping Supporting Documentation: Keeping thorough records of income and expenses is vital. Without proper documentation, the organization could face challenges during audits.
Incorrect Calculation of Tax liability: Miscalculating taxes owed on unrelated business income can lead to overpayment or underpayment, neither of which is desirable.
Failure to Seek Professional Guidance: Some individuals believe they can navigate the process without help. Consult a tax professional or accountant for better accuracy and compliance.

Documents used along the form

When organizations file Form 990-T to report their unrelated business income, they often require additional forms and documents to complete their tax responsibilities. Understanding these documents can help ensure compliance and a smoother filing process.

Form 990: This is the annual return for tax-exempt organizations. It provides a comprehensive overview of the organization’s finances, activities, and governance. Form 990 helps determine the organization’s ongoing eligibility for tax-exempt status.
Form 990-EZ: A simplified version of Form 990, this form is designed for smaller organizations with less complicated financial situations. It streamlines the reporting process, reducing the burden on smaller nonprofits.
Schedule A: This schedule supplements Form 990 and is specifically for organizations seeking public charity status. It details the organization’s public support and provides critical information about its income sources and fundraising activities.
Schedule G: If an organization engages in professional fundraising services or employs fundraising professionals, it must complete this schedule. It discloses details about fundraising activities and the compensation of fundraisers.
Form 982: This form is used to claim a reduction in tax attributes due to discharge of indebtedness. It may be necessary if an organization has experienced debt forgiveness and must assess the impact on its tax position.
Form 706: In the event of an estate tax obligation, this form is required for reporting the transfer of the decedent’s entire estate. It assesses and calculates the tax due on the estate’s value upon the owner’s passing.

Each of these forms plays a significant role in ensuring that tax-exempt organizations maintain compliance with IRS regulations. By familiarizing oneself with them, organizations can streamline their operations and avoid potential pitfalls related to taxation and reporting.

Similar forms

The IRS Form 990 is a public disclosure form used by tax-exempt organizations to provide the IRS with detailed information about their financial activities and compliance with tax regulations. Similar to Form 990-T, which is specifically designed for tax-exempt organizations engaged in unrelated business income activities, this form captures informative data on how these organizations operate. Both forms require organizations to disclose their revenue, expenses, and net assets, promoting transparency and accountability regarding financial practices in the nonprofit sector.

An additional document that shares similarities with Form 990-T is the IRS Form 1065, used by partnerships for reporting income, deductions, and credits. While 1065 is tailored to partnerships rather than nonprofits, both forms seek to provide insight into financial activities. They involve reporting the net income that is taxable for the entity and include a detail-oriented approach to various financial components such as income from sales or services.

The IRS Form 1040, particularly the sections on Schedule E regarding rental income and royalties, shows another layer of resemblance to Form 990-T. Individuals and organizations file Schedule E to report income received from rental properties and royalties. Like 990-T, it requires an accounting of income that is potentially subject to taxation. Both documents aim for clear reporting of income-generating activities that may otherwise be exempt from taxation in their respective contexts.

IRS Form 1120, used by corporations to report their income tax, also shares characteristics with Form 990-T. Corporations, like tax-exempt organizations, must report their income, expenses, and tax obligations. Key parallels lie in the necessity of transparency regarding sources of income and the requirement to comply with specific tax laws. Although 1120 serves profit-driven entities, the organizational structure and need for financial documentation tie it closely to the filing requirements of Form 990-T.

Finally, Form 5500, which is used by employee benefit plans to provide the Department of Labor with information about plan assets, investments, and operations, bears a relationship to the IRS Form 990-T. Both forms ensure accountability and transparency in financial reporting, albeit in different contexts. Form 5500 emphasizes employee benefits and retirement plans while Form 990-T highlights unrelated business income for tax-exempt organizations. Each form plays an integral role in regulating entities and informing the government and the public about financial activities.

Dos and Don'ts

When filling out the IRS 990-T form, it's essential to be thorough and accurate. Follow these guidelines to help ensure a smooth process.

Do gather all necessary financial documents ahead of time.
Do accurately report all unrelated business income.
Do double-check your calculations before submitting.
Do include any applicable deductions for expenses.
Don't leave any sections blank; complete each part to avoid delays.
Don't submit the form late; be aware of deadlines.

Following these pointers can help minimize errors and ease the submission process. Staying organized and informed is key to successfully completing the IRS 990-T form.

Misconceptions

The IRS Form 990-T is sometimes clouded by misunderstanding. Here are ten common misconceptions about this important tax form:

The IRS 990-T is only for charities. Many believe only nonprofit organizations need to file this form. In reality, any tax-exempt organization that earns unrelated business income (UBI) must file it.
All income earned by nonprofits is tax-exempt. People often assume that because an organization is classified as non-profit, all its income is automatically tax-free. However, income that is unrelated to the nonprofit’s primary mission may be subject to taxation, necessitating the 990-T filing.
Form 990-T is the same as Form 990. While similar in name, these two forms serve different purposes. Form 990 provides a comprehensive overview of the nonprofit’s financial situation, while Form 990-T deals specifically with unrelated business taxable income.
Filing Form 990-T is optional. Some organizations mistakenly believe that reporting unrelated business income is at their discretion. In truth, filing is required when income exceeds $1,000.
Only large organizations need to file Form 990-T. This misconception overlooks the fact that any tax-exempt organization, regardless of size, must file if it has UBI above the threshold.
Nonprofits can ignore losses on unrelated business activities. It's true that losses can offset UBI, yet some nonprofits think they can simply avoid reporting them. Properly documenting these losses on Form 990-T can be beneficial for tax calculations.
Only UBI from a single source needs to be reported. Many nonprofits think only income from one business line should be reported. Instead, all sources of unrelated business income must be aggregated on the form.
Form 990-T does not require detailed financial information. Organizations may feel they can get away with vague reporting. However, the IRS requires detailed financial statements to ensure transparency and accuracy.
Filing late will incur the same penalties for nonprofits as it would for other businesses. While late filing can indeed result in penalties, nonprofits face specific requirements and potential exemptions, depending on their situation.
Once filed, Form 990-T cannot be amended. Some organizations assume their filings are set in stone. Yet, just like other tax returns, the 990-T can be amended if errors or changes occur.

Understanding these misconceptions can reduce confusion and aid in better compliance with relevant tax obligations. Nonprofits should take the necessary steps to educate themselves about the IRS requirements for Form 990-T.

Key takeaways

Understand the Purpose: The IRS 990-T form is specifically for tax-exempt organizations to report unrelated business income.
Know When to File: File this form annually if your organization earns over $1,000 in unrelated business income.
Gather Required Information: Collect financial data related to your unrelated business activities and associated expenses before starting the form.
Identify Unrelated Business Income: Ensure you correctly identify what constitutes unrelated business income to avoid errors.
Deductible Expenses: Familiarize yourself with which expenses can be deducted from your unrelated business income to lower your tax liability.
Consider State Requirements: Be aware that some states may have additional filing requirements or taxes on unrelated business income.
Payment of Taxes: If your organization owes taxes, submit payment alongside the 990-T form to avoid penalties.
Consult a Professional: When in doubt, seek assistance from a tax professional to ensure accurate filing and compliance.