Q: Help! It’s tax season and our nonprofit is e-filing with the IRS for the first time. What do we do?
A: Thanks to the pandemic, many nonprofits have filed for an extension to complete their 990s for 2020.* Most nonprofits are now required to file their 990 annual tax form electronically (for fiscal years ending after July 2020). If you mailed in a paper form last year, you likely received a letter from the IRS informing you of this change.
Small organizations may file the 990-EZ or the Form 990-N, Electronic Notice (also known as the Postcard). 990-EZ filers (revenue under $200,000) have one more year to transition.
How do you file electronically? Either work with your accountant to file it for you or use a software or web application of your choice. There is generally a fee. The Aspen Institute recently published a general introduction to the e-filing process. The brochure will walk you through the benefits of e-filing, who needs to file electronically, how to navigate the filing process. And it’s so much easier to read than the IRS’s website!
This change will be very positive for the nonprofit sector. Having all the 990 data available electronically will improve transparency, lead to quicker availability of data, and support improved research on trends in the sector.
The National Council of Nonprofits has more resources on Federal Filing Requirements.
Curious about nonprofit finance? Check out our anytime learning course, “Finance Unlocked for Nonprofits” at the Washington Nonprofit Institute. (This is a great starting point for new treasurers.) We’ll host a live training this Fall, so you have a chance to ask nonprofit experts questions in real time. Make sure you hear about this and other learning opportunities by subscribing to our learning mailing list.
* This post was updated on June 23, 2021. It previously stated that “The deadline was moved from May 15 to July 15 for those of us with calendar fiscal years” but we could not find official confirmation of this information. Our apologies if this caused any confusion.