Monday, January 17, 2011

IRS Increases Form 990 Filing Threshold; California, Not Yet...

Some exempt organizations that previously were required to file Form 990/990-EZ may now file the short "e-postcard" Form 990-N. The IRS announced last week that, pursuant to Revenue Procedure 2011-15 (pdf), small exempt organizations whose gross receipts are not normally more than $50,000 are relieved from the requirement for filing Form 990 (which includes the Form 990-EZ). The previous filing threshold had been $25,000. Regardless of their gross receipts, all supporting organizations must file Form 990 (or 990-EZ), all private foundations must file a Form 990-PF, and churches and their related entities are not required to file informational returns.

While this is a welcome change, insofar as it reduces the filing burden for many organizations, it may create some confusion for California exempt organizations, since the filing threshold for the Form FTB199 is still set by law at $25,000.  It should also be noted that, effective for tax years beginning on or after January 1, 2010, small tax-exempt organizations in California with gross receipts normally equal to or less than $25,000 must file FTB 199N, the California e-Postcard similar to Form 990-N.

Thus, if an organization normally has gross receipts less than $25, 000, it will be able to file both Form 990-N and Form 199N. However, if it has gross receipts less than $50,000 and more than $25,000, it may file Form 990-N, however it will still be required to file the full Form 199.  Since any organization may file a complete Form 990, organizations in this situation may decide to file both Form 990 (or Form 990-EZ) and Form 199.

1 comment:

Anonymous said...

Very Helpfiul. Thank you. I filed the 990 N and got a letter recently asking why we had not filed a 199N. I was confused. Until I read your post. Thanks