Getting To Know Your Form 990 – Highlights from the May 2021 HBK Nonprofit Solutions webinar

Date May 10, 2021

Presenters: Kathleen Clayton, Principal, Co-chair, HBK Nonprofit Solutions; and Ashlynn Reeder, CPA, Manager

The webinar featured a discussion of the basics of IRS Form 990, which provides the public with financial and other information about a nonprofit organization. Highlights from the hour-long presentation include:

Who has to file?

Any organization classified as federal tax-exempt under 501(a), or Section 527 for political organizations, has to file. Even if you are inactive you have to file, or if you’ve submitted for tax-exempt status but haven’t received your determination letter. You can “assume” your status for up to 27 months after your request.

Some entities don’t have to file: certain religious, political, and government organizations. However they may elect to file. Why? Typically, because there is a donor or grantor asking for a Form 990.

Forms and thresholds

  • The Form 990N, or “ePostcard,” is available to organizations with gross receipts for the year of $50,000 or less. It is easy to complete and most organizations can do it in-house.
  • The Form 990EZ, typically a four-page form, is designed for organizations with gross receipts for the year of more than $50,000 and less than $200,000.
  • Form 990 is for organizations with equal to or more than $200,000 in receipts and assets at year-end of equal to or more than $500,000. It can be complicated and can run as many as 100 pages depending on schedules and narratives.
  • Form 990 PF is for private foundations.


  • Some organizations elect to file up, that is to do a more complex form than required. They do so to tell more of their story, to provide more information to potential donors. The full Form 990 tells your whole story.
  • Form 990 is not just a tax return, but can be the organization’s most valuable marketing tool, though it is typically underutilized as such. It is available to the public free via or, where you can find up to three years of Form 990 filings for almost all filing organizations. The websites are about five to seven months behind filings because filings go through the IRS before they are available for posting. The IRS Charity Navigator will show you if an organization’s status has been revoked.
  • Other reasons to post your Form 990: charity rating services comparing your organization to your competitors, funding sources looking at your organization, and state regulators looking for compliance. So it is important to get your Form 990 complete and correct.
  • A best practice is to post your last three years of 990s on your website and direct people to it for current information on your organization.
  • Data on tax-exempt organizations can also be found at:
  • Forty states require charitable organization postings. Each state does it differently; some have their own forms and might or might not post your 990.

Form 990 In Detail

Page 1: Provides a high-level view of the organization: website, financial data, employees, volunteers, mission statement. It is a summary of your organization’s story, and may be the only page some readers look at.

Page 2: Most of page 2 is dedicated to program descriptions, based on the amount of expenses for each. Recommendations are to include full descriptions of your programs and to update your narratives each year, especially the metrics.

Pages 3 and 4: This is the questionnaire portion of the Form 990, which will be fulfilled with the supplemental schedules that will be attached. Every “yes” answer should have a corresponding schedule to support and explain it.

Page 5: The tax compliance part of the 990 will be of interest to readers for your number of employees and independent contractors as well as unrelated business income.

Page 6: The governance part of the form touches on your board of directors, policies in place, how your organization is managed. You need the policies to be in place before the end of the tax year you’re reporting on. Readers will focus on the makeup of your board.

Page 7: You are reporting on the people of your organization: board of directors, trustees, organization officers and executives, key and highest-compensated employees. “Current” employees are anyone who served during the tax year. Compensation is what is reported on W-2s or 1099s for individuals. Only voting members of the board are listed. It can be confusing sometimes as to who to include.

Page 8: List your board members and contractors being paid more than $100,000, that is, those you rely on heavily to execute your programs.

Page 9: Requests financial information, a statement of your revenue. It shows related, unrelated, and excluded income. Readers are typically focused on the total revenue line and your investment gains.

Page 10: The statement of functional expenses includes spending on programs and management. Readers focus on compensation, grants, and legal and accounting fees. Be sure to evaluate how you divide up your expenses, as your allocations are likely to change year to year.

Page 11: This look at your balance sheet breaks out the summary on Page 1 to show assets and liabilities. Readers will focus on how much cash you have, your assets and investments, and what you owe.

Page 12: The final page of the core part of Form 990 summarizes your total revenue, total expenses, reconciled net assets, unrealized gains and losses, and donated services and use of facilities, and answers questions about your financial statement.

The Schedules

Schedule A: The public support test is a snap shot of your sources of revenue and percentage of public support, which will determine whether you can continue to be classified as a publicly supported charity. A third of your revenue stream has to come from the “general public.”

Schedule B – Lists your donors and contributors. This schedule is not disclosed to the public.

Schedule C – Reports lobbying activities.

Schedule G – Reports on fund raising events and activities.

Schedule I – Shows where you gave grants.

Schedule J – Provides additional compensation information as necessary on highly compensated individuals and how their compensation is determined, and any non-taxable compensation.

Schedule O – A catch-all including overflow program descriptions, required and voluntary disclosures, some detail from statement of functional expenses, and a statement of revenue.

Common errors completing Form 990

  • Missing the deadline or using the wrong form: Filing is due the 15th day after the 5th month after year end (May 15). You can get an extension for another six months. We recommend filing by May 15, as the information can be stale if you wait to file until the end of an extension. Late filing fees can be up to $50,000 and can be assessed against the organization or “responsible parties.” Three years of not filing will cost you your exempt status.
  • Incomplete form: They are treated as late filings. You’ll receive a notice, then a penalty.
  • Incorrectly reporting voting board members and independent voting board members: You report only voting members, but that includes anyone who serves only part of the year.
  • Overlooking something new: Did you do anything new this year? If so, you must explain it on Schedule O.
  • Not filing a Schedule A or doing it incorrectly. Most important are the percentages relating to your public support.
  • A missing or incomplete Schedule B, including not reporting “anonymous” donors: Schedule B is redacted for public inspection. Be careful not to post it on your website.
  • A missing Schedule O: it is required of every filer and includes describing the process for reviewing your Form 990 as well as reporting on the organization’s governing documents and conflict policies, and the financial statement that is available to the general public.
  • Other common errors include undisclosed business or family relationships of employees and board members, incorrectly reporting compensation, including social security numbers (nowhere is that required), paper returns not signed by a current officer or CFO (the IRS prefers that you e-file), and reporting compensation differently on different pages of the return.


  • Update any stale program narratives to make 990 look the best it can.
  • Review policy changes from the previous year.
  • Make sure state registrations are in place where they are required.
  • Review and update your current bylaws.
  • Determine ahead of time the information you need for your 990 filing.
  • Review and understand your 990 before signing it; ask your preparer any questions you have before signing.
  • HBK offers board training on 990 because the board is as responsible for filing on time and correctly as the officers of the organization.

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