Form 990-T (2020)

What Is Form 990 T 2020?

Form 990-T is an annual tax return used by tax-exempt organizations to report their unrelated business income and to pay income tax on that revenue. It’s separate from other tax forms that non-profit organizations are required to file, like Form 990 or 990-EZ. The 'T' in the form's title represents 'Taxable' and helps distinguish this form from the more generally known ones that deal with tax-exempt status.

Who needs to file form 990-T?

The requirement to file a 2020 Form 990-T is not universal to all tax-exempt entities. It’s specifically designed for organizations that have gross income of $1,000 or more from a regular trade or business that is not related to their exempt purpose. Common examples of these organizations include charities, universities, and religious institutions that generate income through activities such as advertising, rent from real property, or retail sales.

How to Fill Out the 2020 Form 990 T

Understanding how to complete this fiduciary reporting form is essential for compliance and avoiding any unnecessary penalties. Here’s a breakdown of the process:

1. Start by providing the Employer Identification Number (EIN) of the organization in the designated field at the top of the page.
2. Enter the full legal name and address of the organization, together with the name and title of the officer.
3. Ensure you indicate the correct tax year for which you are filing the return.
4. Record the gross unrelated business income after pulling the numbers from your financial records, and enter this in the relevant input box.
5. Subtract the cost of goods sold, if applicable, to determine and enter the gross income from unrelated business activities.
6. Deduct the allowed business deductions, such as salaries, repairs, etc., and input the total in the provided space to calculate the net unrelated business taxable income.
7. Include any adjustments such as net operating loss deduction from prior years.
8. Proceed to the specific deductions section and fill in the applicable amounts for contributions, depreciation, and other deductions as relevant to your organization's activities.
9. Calculate your tax liability using the schedule provided in the form, and populate the tax owed field with the resultant figure.
10. If your organization is subject to proxy tax on certain membership dues, document this amount in the appropriate area on the form.
11. Include any payments already made towards the tax year, such as estimated tax payments or federal tax deposits.
12. If you have overpaid, indicate the amount of overpayment and specify whether it should be credited to the next year's estimated tax or if you require a refund.
13. Sign the certification at the end of the form, ensuring the authorized officer inputs their name, title, and the date signed.
14. If a paid preparer has been involved, ensure their information is inputted and that they sign off in their designated section.
15. Review the completed form to ensure all entered information is accurate and complete before proceeding to the next step.
16. Now you may save your progress or download the completed form for your records. If you need to submit it electronically, follow their procedure to e-file directly through their platform.

Stay compliant and avoid penalties

Timely and accurate filing of Form 990-T is imperative for maintaining tax-exempt status and avoiding fines. The IRS imposes penalties for late filing and for organizations that underreport or fail to report their unrelated business income. Therefore, tax-exempt organizations should be proactive in understanding their obligations and filing their forms well before the deadline.

Current Version of the Form 990-T