Form 990-N 2018 Instructions for Small Nonprofits

Filing Form 990-N is one of the most important responsibilities for small tax-exempt organizations that want to maintain their tax-exempt status with the Internal Revenue Service. Known as the “e-Postcard,” this electronic notice provides a simplified method for reporting basic organizational details while meeting federal annual reporting requirements for the 2018 tax year.

The IRS requires all small tax-exempt organizations with annual gross receipts normally under $50,000 to file Form 990-N annually. If an organization fails to submit this required electronic form for three consecutive years, it will face automatic revocation of its tax-exempt status. Filing accurately and on time protects the organization’s standing and demonstrates responsible financial management.

Form 990-N was specifically designed to make compliance easier for small nonprofits. Unlike longer returns such as Form 990 or 990-EZ, the e-Postcard requires only basic information—such as the organization’s legal name, Employer Identification Number, mailing address, and principal officer website address. Once filed electronically through the IRS website, this online filing confirms the organization’s continued eligibility and fulfills its annual federal reporting obligation.

Understanding Form 990-N and Its Purpose

Form 990-N allows exempt organizations to confirm their status. This ensures continued eligibility for tax-exempt status and maintains an active listing in the IRS database. The Form 990-N e-Postcard must be filed electronically through the IRS website or an authorized e-file provider because paper filings are not accepted. Once filed electronically, the IRS updates its database, confirming that the organization’s tax-exempt status remains active for that tax year.

Who Must File Form 990-N

Small tax-exempt organizations: Nonprofits with annual gross receipts of normally $50,000 or less must file Form 990-N to meet federal reporting requirements.
Fiscal filers: Organizations operating on a fiscal year must file by the fifteenth day of the fifth month after the organization’s accounting period ends.
Supporting organizations: These entities must usually file Form 990 or 990-EZ instead of the 990-N because of their classification.
Nonexempt charitable trusts: These must file other forms, such as Form 1041, rather than the e-Postcard because they are not exempt organizations.

Organizations Not Eligible to File

Private foundations: These entities must file Form 990-PF, which provides detailed financial information, including total and net assets.
Larger organizations: Nonprofits with gross receipts exceeding $50,000 must use Form 990 or 990-EZ, which require full financial schedules.
Group return participants: Subordinate organizations included under a parent group return should not submit a separate Form 990-N.
Complex operations: Organizations with multiple programs or international activities must use Form 990 to report complete financial and program data.

Key Filing Requirements and Annual Reporting Obligations

Small nonprofits must follow specific IRS filing standards to remain compliant and prevent automatic revocation of tax-exempt status.

Information Required for Filing

Legal name: The organization’s legal name must exactly match incorporation records and the IRS database to avoid filing rejection.
Organization’s EIN: The Employer Identification Number identifies the organization’s IRS account and ensures correct linkage to its record.
Mailing address: The current business mailing address ensures accurate IRS correspondence and proper delivery of confirmation notices.
Principal officer: The principal officer’s name and address identify the person responsible for the organization’s operations and filings.
Principal officer website address: Including a website address increases transparency and reinforces accountability for small tax-exempt organizations.

Annual Filing Rules for Exempt Organizations

File annually: The IRS requires small tax-exempt organizations with annual gross receipts under $50,000 to file Form 990-N annually.
Filing deadline: The due date is the fifteenth day of the fifth month after the organization’s accounting period ends.
Tax year: The organization’s tax year ends on December 31 for calendar filers or at the end of the fiscal year for fiscal filers.
Electronic filing: The IRS mandates electronic filing through the IRS website or an authorized e-file provider; paper forms are not accepted.

Step-by-Step Instructions to File Form 990-N Electronically

Follow these steps carefully to file Form 990-N accurately and ensure acceptance in the IRS database.

Step 1: Access the IRS Online Filing System

Visit the IRS website and open the Form 990-N Electronic Filing System. Use an existing IRS account to log in, or create one through Login.gov or ID.me. Before proceeding, verify that the organization’s Employer Identification Number (EIN) is active and correctly linked to the organization’s tax-exempt record in the IRS database.

Step 2: Verify Eligibility

Review the organization's financial information to confirm that it qualifies to file the e-Postcard. The organization’s annual gross receipts must normally be $50,000 or less to be eligible. Furthermore, ensure the organization is not classified as a private foundation or supporting organization, as these must file a different IRS form under separate reporting requirements.

Step 3: Gather Basic Information

Collect all details required for the filing, including the organization’s legal name, mailing address, EIN, and the principal officer’s name and address. If available, include the organization’s website address. Verify that every item matches IRS records exactly. Confirm the correct tax year start and end dates based on how the organization’s accounting period ends.

Step 4: Complete the Electronic Form

Enter the gathered information directly into the 990-N e-Postcard system. Carefully verify each entry, ensuring the legal name, EIN, mailing address, and principal officer details are accurate. Review the organization’s gross receipts information and confirm the tax year listed is correct. Completing this step helps prevent filing rejections or data errors in the IRS database.

Step 5: Submit and Confirm Filing

Once all required information is reviewed, select “Submit Filing” to finalize the process. The IRS will display an on-screen confirmation message showing the submission date and time. Save or print this confirmation immediately for your records. If the organization’s filing does not appear in the IRS database within several days, contact the IRS for verification.

Filing Deadlines and Consequences of Missing Them

Timely filing is essential to protect an organization’s tax-exempt status and avoid automatic revocation.

Understanding the Due Date

Form 990-N must be filed by the fifteenth day of the fifth month after the organization’s tax year ends. For example, if the fiscal year ends on December 31, the due date is May 15.

Consequences of Late Filing

Automatic revocation rule: Failure to file Form 990-N for three consecutive years results in automatic revocation of the organization’s tax-exempt status.
Reinstatement process: Once revoked, an organization must reapply for tax-exempt status by submitting the proper IRS form and paying applicable user fees.
Business day rule: If the due date falls on a weekend or holiday, the organization may file on the next business day.
IRS database updates: Successfully filed forms appear in the IRS database, confirming compliance and continued recognition as a qualified tax-exempt organization.

E-Filing Requirements and Technical Standards

Electronic filing ensures faster processing and accurate reporting for all exempt organizations. The IRS requires Form 990-N to be filed electronically, as paper filings are not accepted.

System Compatibility

Supported devices: Desktop and laptop computers meet the requirements for e-filing. Smartphones or tablets cannot process the authorized e-file form properly.
Browser requirements: Use a current Chrome, Edge, or Firefox browser with JavaScript enabled. Outdated versions may prevent the IRS form from loading correctly.
Stable internet connection: A secure broadband connection ensures data transfers smoothly and reduces errors during online filing.
Authorized e-file provider: Use the official IRS website or verified providers listed on the IRS site. This protects your organization’s data and guarantees filing acceptance.

Account and Security Settings

IRS account setup: Create or update your IRS account credentials before filing to access the e-Postcard system securely.
Two-factor authentication: Enable this security feature when logging into Login.gov or ID.me.
Password management: Use strong passwords containing letters, numbers, and symbols. Keep login details confidential to maintain secure access.
Session timeout warnings: Complete the filing within one session, as the IRS system automatically logs users out after a period of inactivity.

Maintaining Compliance Across Consecutive Years

Organizations must file Form 990-N for every applicable tax year to maintain active tax-exempt status. Filing consistently demonstrates good governance and responsible financial oversight.

Annual Filing Consistency

File annually: Submit the e-Postcard each year, even if the organization’s gross receipts remain the same or no activity occurred.
Three consecutive years rule: Failure to file for three consecutive years results in automatic revocation of the organization’s tax-exempt status.
Reinstatement process: Revoked organizations must apply again for exemption and pay the applicable IRS reinstatement fee.
Verification through the IRS database: Confirm successful submissions each year by checking the organization’s record in the IRS database.

Organizational Growth and Filing Transitions

Exceeding the threshold: When the organization’s annual gross receipts exceed $50,000, transition to Form 990 or 990-EZ as required.
Monitoring financial health: Review net assets, total assets, and gross receipts yearly to assess whether the organization remains eligible for 990-N.
Accounting software updates: Use accounting software that tracks revenue and expenses to calculate annual gross receipts accurately.
Internal calendar reminders: Schedule reminders at the end of each tax year to avoid missing filing deadlines and prevent automatic revocation.

Filing for Zero Activity or Dormant Years

Organizations that experience no financial activity during a tax year must still file the e-Postcard. The IRS considers inactivity part of the annual compliance requirement.

Dormant Organizations

Definition: A dormant organization remains legally active but reports no income, expenses, or operational activities for the tax year.
Filing duty: Even without activity, the nonprofit must file Form 990-N to maintain its tax-exempt status.
Information required: Provide the same legal name, mailing address, EIN, and tax year details as in an active filing.
Record retention: Keep the confirmation notice and all related documents with the organization’s annual compliance records.

Terminated or Closed Organizations

Definition: Terminated organizations have permanently ceased operations and no longer maintain tax-exempt status.
Final filing: File the last Form 990-N, indicating termination and report that the organization no longer operates.
Future obligations: Once dissolved, the organization must not file future returns unless it reestablishes legal status.
IRS confirmation: The IRS database will show inactive or revoked status once the termination filing is processed.

Common Errors and Recordkeeping Obligations

Accuracy in Form 990-N filing is essential for maintaining tax-exempt status and avoiding unnecessary complications with the IRS. Common errors typically involve technical issues, incorrect data entry, or missing organizational details.

Common Filing Mistakes

Using mobile devices: Smartphones and tablets often cause system errors during e-filing because the IRS form is designed for desktop compatibility only.
Incorrect EIN format: Entering an Employer Identification Number without a hyphen or using an invalid number prevents successful submission and causes IRS rejection.
Mismatched legal name: Filing with an incorrect or abbreviated legal name that does not match incorporation documents results in form rejection.
Old mailing address: Using an outdated mailing address causes delays in receiving confirmation and future IRS correspondence.
Multiple browser tabs: Keeping several IRS form pages open simultaneously increases the risk of submission errors or data conflicts during e-filing.

Avoiding Automatic Revocation

File annually: Consistent filing demonstrates compliance with the IRS’s annual reporting requirements for small tax-exempt organizations.
Three consecutive years rule: Failure to file Form 990-N for three consecutive years results in automatic revocation of tax-exempt status.
Timely submission: File Form 990-N by the fifteenth day of the fifth month after the tax year ends to avoid compliance gaps.
Monitoring IRS database: Verify that the organization’s record appears in the IRS database each year to confirm active tax-exempt status.

Recordkeeping and Documentation

Save confirmation records: Keep electronic and printed copies of each successfully filed Form 990-N for at least three years.
Maintain financial information: Retain accounting records such as receipts, expenses, and statements to verify the organization’s gross receipts totals.
Organize documentation: Store IRS confirmations, EIN details, and annual summaries to simplify future audits or verifications.
Use accounting software: Reliable accounting software tracks annual gross receipts, net assets, and total assets for accurate reporting and eligibility checks.

Monitoring Organizational Financial Health

Reviewing an organization’s financial status helps confirm ongoing eligibility for Form 990-N filing and prevents errors in future tax years.

Evaluating Financial Indicators

Gross receipts: Review all income sources and ensure the organization’s annual gross receipts remain at or below the $50,000 threshold.
Net assets: Evaluate changes in assets and liabilities to identify whether the organization’s financial position aligns with small nonprofit criteria.
Total assets: Compare asset totals across tax years to determine whether growth requires a transition to Form 990 or 990-EZ.
Financial stability: Analyze revenue trends to forecast whether future expansion might change the organization’s exempt filing requirements.

Planning for Future Growth

Budget projections: Use financial data to plan budgets that keep operations within the small tax-exempt organization limit.
Strategic review: Assess how future fundraising or program expansion may impact eligibility for simplified electronic filing.
Governance education: Train board members on compliance obligations to maintain accurate reporting for each tax year.
Fiscal monitoring: Conduct quarterly financial reviews to identify and address discrepancies in income or expenses early.

Frequently Asked Questions

What is Form 990-N, and who must file it?

Form 990-N, the e-Postcard, is an electronic notice required for small tax-exempt organizations with annual gross receipts of normally $50,000 or less. The IRS requires these exempt organizations to file annually to confirm active tax-exempt status. Filing helps maintain visibility in the IRS database and prevents automatic revocation for missing annual reporting requirements.

When is the Form 990-N filing deadline?

Form 990-N must be filed by the fifteenth day of the fifth month after the organization’s tax year ends. For calendar-year filers, this is typically May 15. The filing is due on the next business day. When the due date falls on a weekend or federal holiday, it is due on the next business day. Meeting this deadline helps ensure compliance with IRS annual reporting obligations.

What happens if an organization fails to file Form 990-N?

If an organization fails to file Form 990-N for three consecutive years, the IRS will automatically revoke its tax-exempt status. Once withdrawn, the organization must reapply for recognition and pay the applicable user fee. Filing consistently each tax year prevents revocation, preserves tax-exempt eligibility, and keeps the organization in good standing with the IRS.

Can organizations with zero income or activity file Form 990-N?

Small tax-exempt organizations that did not have financial activity during the tax year must still file Form 990-N to remain compliant. Even if the organization is inactive, it must confirm that its annual gross receipts are normally below $50,000. Filing demonstrates compliance, preserves tax-exempt status, and ensures continued listing in the IRS exempt organizations database.

Can Form 990-N be filed using paper forms?

No, Form 990-N is an electronic form that must be filed online through the IRS website or an authorized e-file provider. Paper filings are not accepted. Electronic filing reduces errors, provides immediate confirmation, and secures the organization’s financial information. The IRS requires e-filing to ensure faster processing and more accurate recordkeeping for exempt organizations.

What if the organization’s gross receipts exceed $50,000?

Organizations with annual gross receipts exceeding $50,000 must file Form 990 or Form 990-EZ instead of Form 990-N. These forms require detailed financial information, including total assets and net assets. Before filing, organizations should review their economic status and use accounting software to ensure accurate reporting for the appropriate tax year and filing category.

Can a revoked organization regain tax-exempt status?

An organization that loses its tax-exempt status through automatic revocation can regain it by reapplying with the IRS. The organization must submit the correct exemption application, such as Form 1023 or 1024, and pay the required user fee. Once reinstated, the organization must continue filing Form 990-N or other applicable forms annually to maintain compliance.

Checklist for Form 990-N 2018 Instructions for Small Nonprofits