Form 990-N 2020 Instructions for Small Organizations

Understanding the instructions on Form 990-N 2020 is essential for small tax-exempt organizations that must comply with annual reporting obligations to the Internal Revenue Service (IRS). This guide provides clear and practical direction on how to file Form 990-N, also known as the e-Postcard, to maintain compliance and preserve your organization’s good standing.

For many small nonprofits, charitable trusts, and supporting organizations, filing Form 990-N is a simple yet critical part of maintaining their tax-exempt status. The form confirms that your organization’s annual gross receipts remain within the $50,000 or less IRS threshold. It also keeps your information in the IRS database, ensuring public transparency and accountability.

Filing the correct form on time satisfies federal requirements and protects your eligibility for grants, donations, and other funding opportunities. Whether your organization is new or long-established, understanding the filing process, key requirements, and potential pitfalls will help you submit an accurate return, avoid penalties, and prevent automatic revocation of your tax-exempt status.

Understanding Form 990-N and Its Purpose

Form 990-N, the e-Postcard, is a simplified electronic notice used by small tax-exempt organizations to meet annual reporting requirements. It allows the IRS to confirm that these organizations are still active and operating within compliance guidelines.

Who Needs to File Form 990-N

Small nonprofits, charitable trusts, and other exempt organizations with annual gross receipts of normally $50,000 or less must file Form 990-N electronically each tax year.

Why the e-Postcard Matters

Compliance confirmation: Filing the e-Postcard ensures that a tax-exempt organization maintains active status in the IRS database and fulfills all annual reporting requirements.
Public accountability: The e-Postcard lets the public view essential information about exempt organizations, promoting transparency and trust in nonprofit financial reporting practices.
Simplified process: The e-Postcard offers an easy filing option for small tax-exempt organizations, removing unnecessary paperwork while ensuring timely and accurate compliance with IRS rules.

Eligibility for Filing Form 990-N

Before filing, organizations must determine if they qualify to submit Form 990-N instead of another IRS form.

Eligible Tax-Exempt Organizations

Small tax-exempt organizations: These organizations qualify if their annual gross receipts normally total $50,000 or less for the current tax year, ensuring eligibility for simplified filing.
Supporting organizations: Certain charitable trusts treated as supporting organizations may file Form 990-N if their total assets and gross receipts remain within IRS limits.
Fiscal filers: Organizations operating on a fiscal year schedule must file the correct form based on the applicable tax year that their financial records follow.

Ineligible Organizations

Private foundations: Private foundations must file Form 990-PF regardless of their gross receipts or total assets, ensuring full disclosure of their activities to the IRS.
Large exempt organizations: Exempt entities with annual gross receipts over $50,000 must file either Form 990 or Form 990-EZ, depending on their filing status.
Group returns: Subordinate organizations covered under a group exemption filing cannot submit Form 990-N separately under their name.

Filing Process Overview for Form 990-N Electronic Notice

Each small nonprofit or exempt organization must file electronically through the IRS website using a secure account. The process is quick, free, and designed for easy filing.

Required Information to Complete the Form

Legal name and mailing address: For correspondence purposes, the organization must provide its exact legal name as registered with the IRS and its current mailing address.
Principal officer and website address: Each organization must include the principal officer’s name, title, and official website address to verify authenticity and transparency in reporting.
Tax year and account details: Organizations must confirm whether they follow a calendar or fiscal year and ensure their account reflects the correct tax year-end.
Organization’s annual gross receipts: Each filer must declare that the organization’s annual gross receipts are normally $50,000 or less to confirm eligibility for Form 990-N.
Employer identification number: The organization must include its employer identification number (EIN), which links its records to the IRS database for consistent tracking.

Accessing the IRS e-File System

Create or access an account: Organizations must log in to the IRS online system or create an account to begin the electronic filing process for Form 990-N.
Select Form 990-N (e-Postcard): Filers must choose the correct electronic form designed specifically for small exempt organizations that meet the annual gross receipts threshold.
Complete and submit: Each organization must carefully review its information and submit the form electronically to ensure the return is accurate and complete.

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

This section provides detailed instructions for small nonprofits and exempt organizations to follow when completing and submitting Form 990-N electronically to the IRS. Each step is essential to ensure the accuracy of filing and the continued maintenance of tax-exempt status.

Step 1: Determine Filing Eligibility

Confirm that your organization qualifies to file Form 990-N by verifying that annual gross receipts are normally $50,000 or less. Ensure the organization is not a private foundation or part of a group return. Confirm eligibility before proceeding, as filing the wrong form can delay processing and potentially affect your exempt status.

Step 2: Gather Basic Information

Collect all relevant details required for the electronic notice, including the organization’s legal name, current mailing address, tax year, and principal officer information. Make sure every entry matches IRS records precisely. Accurate preparation at this stage prevents unnecessary rejections, submission errors, and delays in confirming your organization’s annual compliance with federal requirements.

Step 3: Access the IRS e-File Portal

Visit the official IRS website and navigate to the Form 990-N electronic filing page. Use your existing IRS account credentials or create a new account if you are a first-time filer. Confirm that your contact information and email address are current so that you can receive submission confirmations and future filing reminders directly from the IRS.

Step 4: Complete the e-Postcard Form

Fill in all required information carefully, including your organization’s name, employer identification number, and tax year. Confirm that annual gross receipts remain under the $50,000 limit. Review every field to ensure consistency and accuracy. Errors in this step may require a new submission or cause temporary removal from the IRS database listing.

Step 5: Submit and Save Confirmation

After completing the form, submit it electronically through the IRS system. Download or print the confirmation page immediately, as it is your official proof of filing. Keep this record with other financial documents for at least three years. Storing confirmation records helps verify compliance and resolve future filing questions or audit inquiries.

Step 6: Verify the Filing Status

Within a few days of submission, check the IRS database to ensure your Form 990-N was received and processed. Look for your organization’s name under active exempt listings. If the confirmation does not appear, contact the IRS support team. Maintaining up-to-date records ensures transparency and preserves your organization’s recognized tax-exempt status yearly.
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Common Filing Issues and How to Avoid Them

Many small nonprofits experience difficulties when filing Form 990-N. Understanding these common problems helps ensure timely and accurate filing.

Frequent Problems

Incorrect account details: Incorrect or outdated account credentials can prevent access to the IRS system and delay the electronic filing of the required e-Postcard.
Mismatched legal name: The organization’s legal name must match IRS records; even minor discrepancies can automatically cause the filing to be rejected.
Wrong tax year selection: Selecting the wrong tax year can result in an inaccurate filing record and may require correction through additional communication with the IRS.
Incomplete data: Missing essential fields, such as mailing address or principal officer information, can cause the IRS to flag or delay your return's processing.
Failure to e-file form: Organizations must submit Form 990-N electronically; paper filings are not accepted under IRS procedures for small exempt organizations.

Preventing Filing Problems

Keep previous filings accessible: Retaining copies of prior submissions allows organizations to maintain consistency and confirm that all identifying details match IRS records.
Use the IRS user guide: The official IRS user guide outlines every required field and provides helpful tips for completing an accurate and compliant electronic notice.
Double-check before submission: Carefully review each entry, including the gross receipts and tax year, to ensure the information matches your organization’s financial records.
Note your due date: Form 990-N must be submitted by the fifteenth day of the fifth month following the close of the organization’s tax year.

Maintaining Tax-Exempt Status

Proper filing helps small tax-exempt organizations remain compliant and avoid automatic revocation. The IRS relies on accurate electronic forms to confirm that organizations continue operating within their exempt purposes.

Consequences of Failure to File

Automatic revocation: Under IRS regulations, organizations that fail to file Form 990-N, 990-EZ, or 990 for three consecutive years will automatically lose their tax-exempt status.
Loss of credibility: Once revoked, an organization loses eligibility for donations, grants, and state-level recognition, making it harder to rebuild public trust and support.
Public disclosure: The IRS database lists automatically revoked entities, allowing donors and the public to see organizations that failed to meet their reporting obligations.

Preventing Automatic Revocation

Timely submission: Always file Form 990-N by the due date to ensure your organization remains in good standing and retains its tax-exempt designation.
Maintain accurate records: Keep all contact, financial, and filing information current within the IRS database to prevent administrative errors or missed notifications.
Use reminders: Establish an internal calendar system or reminder alerts to prevent accidental filing delays that could result in automatic revocation of exempt status.
Monitor the IRS database: Regularly verify your listing on the IRS website to confirm that your electronic filing appears correctly and that your exempt status is active.

Form 990-N Electronic Filing Process for Small Nonprofits

The Form 990-N electronic filing process is designed to help small nonprofits meet their annual reporting obligations quickly and accurately. The IRS e-Postcard platform ensures that information from tax-exempt organizations is properly recorded in the official database.

How the Electronic System Works

Secure account verification: Each filer must log into the IRS system using verified credentials to ensure the organization’s identity and protect sensitive financial information.
Data input and validation: The electronic system automatically validates information such as legal name, EIN, and gross receipts before submission to reduce common filing errors.
Submission acknowledgment: Once filed, the IRS issues an electronic confirmation showing that the Form 990-N was successfully processed and added to the public database.

Advantages of Filing Electronically

Faster processing time: Electronic filing allows the IRS to process submissions instantly, providing confirmation within minutes and minimizing the risk of lost paper records.
Lower error rates: Automated data verification reduces filing mistakes, ensuring that the organization’s gross receipts and other details are reported accurately annually.
Easy record access: Electronic filing provides quick access to past filings, enabling organizations to verify historical data and maintain complete compliance with annual reporting requirements.

Correcting Filing Issues and Reinstating Tax-Exempt Status

If an organization fails to file or encounters filing issues, the IRS offers processes to correct errors and reinstate tax-exempt status. Maintaining compliance is crucial to preserving eligibility for public contributions and grants.

When a Filing Issue Occurs

Technical submission errors: The IRS may not accept or properly record Form 990-N due to system failures, incorrect entries, or outdated login credentials.
Incorrect form selection: Filing the wrong IRS form instead of Form 990-N may delay processing and require additional correspondence to correct the organization’s record.
Missed deadlines: Failing to file by the due date can trigger a notice of noncompliance and lead to automatic revocation of exempt status.

Steps to Reinstatement After Automatic Revocation

Identify the reason for the revocation: Review the IRS database to confirm the revocation cause, which is typically failing to file for three consecutive years.
Submit reinstatement application: File Form 1023 or Form 1024 as appropriate, along with supporting documents and fees, to request reinstatement of tax-exempt status.
Comply with retroactive rules: Organizations seeking retroactive reinstatement must demonstrate reasonable cause for failure to file and submit all missing returns or notices.
Update organization records: Once reinstated, the organization should verify that its name and data appear correctly in the IRS database for future filings.

Case Scenarios: Common Examples of Form 990-N Filing Situations

Real-world examples demonstrate how small nonprofits can avoid common pitfalls and maintain compliance through proper filing and recordkeeping practices.

Late Filing but Successful Correction

A small community group missed its filing deadline due to administrative turnover. After discovering the error, it filed Form 990-N electronically, submitted supporting correspondence, and maintained consistent filings thereafter. Early detection and swift correction prevented automatic revocation and ensured continued tax-exempt status.

Automatic Revocation and Reinstatement

A charitable trust failed to file Form 990-N for three consecutive years and lost its exempt status. It applied for reinstatement, submitted the correct forms, and provided proof of reasonable cause. Once approved, the IRS updated its database, and the trust resumed normal operations while setting future filing reminders to prevent recurrence.

Data Entry Error Resolved Quickly

A small educational organization entered an incorrect EIN during electronic filing. The IRS system rejected the submission, prompting the organization to correct and resubmit immediately. Accurate resubmission ensured compliance, and the organization’s correct information appeared in the IRS database within days, avoiding further issues.

Frequently Asked Questions

What is the purpose of Form 990-N for small nonprofits?

Form 990-N allows the IRS to confirm that small tax-exempt organizations remain active and compliant with annual filing requirements. It provides public transparency by listing your organization’s basic information in the IRS database. Filing this short electronic notice each tax year verifies that annual gross receipts are $50,000 or less and helps protect your tax-exempt status from automatic revocation.

What happens if an organization fails to file Form 990-N for three consecutive years?

If an organization fails to file Form 990-N, 990-EZ, or 990 for three consecutive years, the IRS will automatically revoke its tax-exempt status. To regain compliance, the organization must reapply by filing Form 1023 or Form 1024, pay the required reinstatement fees, and submit any missing filings. Once the IRS approves the application, it will update the organization’s active status in its public database.

How do organizations correct errors after submitting Form 990-N electronically?

If your organization discovers an error after submitting Form 990-N, immediately contact the IRS e-Postcard help desk for correction assistance. The IRS may allow you to resubmit the form with the correct information depending on the situation. Always review your entries carefully before submission, save your confirmation record, and maintain consistent data to ensure accuracy in future electronic filings and annual compliance reports.

Can an organization reapply for exempt status after losing it due to non-filing?

Yes, organizations that lose tax-exempt status for non-filing can reapply by submitting Form 1023 or Form 1024 with supporting documents and payment. The IRS will review the application and determine if reinstatement is appropriate. To regain compliance, the organization must file all missing Form 990-N notices and maintain proper reporting practices to prevent future revocation of tax-exempt status.

When is Form 990-N due for the current tax year?

Form 990-N is due by the fifteenth day of the fifth month after your organization’s tax year ends. For calendar-year filers, this means May 15. Fiscal-year filers must calculate their specific deadline accordingly. Submitting the form on time yearly ensures compliance, preserves your tax-exempt status, and keeps your organization active in the IRS public database.

What information must be included on Form 990-N?

The Form 990-N submission must include your organization’s legal name, mailing address, employer identification number, principal officer’s name, and title. It also requires a statement confirming that your annual gross receipts are normally $50,000 or less. Accurate, up-to-date information ensures smooth IRS processing, maintains compliance, and prevents unnecessary delays or corrections after submission.

How does filing Form 990-N electronically benefit small nonprofits?

Electronic filing offers small nonprofits an efficient, user-friendly, and secure way to fulfill IRS reporting obligations. It eliminates paper forms, mailing costs, and potential delays. Immediate confirmation after submission ensures peace of mind that your organization remains compliant. The system also stores previous filings, allowing easy access, accurate reporting history tracking, and consistent tax-exempt status maintenance.

Checklist for Form 990-N 2020 Instructions for Small Organizations