IRS Form 990-EZ (2024): Short Form for Tax-Exempt Orgs.
What IRS Form 990-EZ Is For
IRS Form 990-EZ (2024) is a simplified annual return for specific tax-exempt organizations. It helps ensure that the IRS has accurate and up-to-date financial and operational information to maintain compliance with tax-exempt status. This form is intended for organizations with gross receipts under $200,000 and total assets under $500,000.
Nonprofits, including private foundations and charities, use Form 990-EZ to meet their reporting obligations. Filing this form promotes transparency in financial activities, which helps prevent misuse of tax-exempt status. Filing correctly is essential for nonprofits to remain in good standing with the IRS and avoid penalties or loss of tax exemption.
When You’d Use IRS Form 990-EZ
IRS Form 990-EZ is typically filed by most nonprofits that have gross receipts under $200,000 and total assets under $500,000. If the fiscal year ends on December 31, the filing deadline is May 15 of the following year, unless an extension is filed. Nonprofits must prepare and submit the form electronically to remain in compliance with IRS regulations.
Missing the filing deadline can result in penalties, and failing to file for three consecutive years may lead to loss of tax-exempt status. Organizations need to ensure all revenue data is accurate and complete. Filing Form 990-EZ provides the IRS with important information about an organization’s financial activities.
Key Rules or Details for 2024
For 2024, all Form 990-EZ filings must be completed electronically. The IRS will not accept paper returns for this tax year. Organizations must submit the form by the due date of May 15, 2025, unless they file for an extension using the e-postcard (Form 8868).
Organizations must verify that all data on the form is accurate and complete to avoid penalties. Filing Form 990-N is an option for smaller nonprofits with gross receipts under $50,000, further simplifying the process. Organizations must comply with IRS rules to ensure their tax-exempt status remains intact and filings are complete.
Step-by-Step (High Level)
- Gather supporting documents: The organization must collect 2024 financial statements, prior filings, and any required IRS documents.
- Use the correct form year: The filer must complete the official 2024 Form 990-EZ instead of using the previous year’s version.
- Complete required parts: The organization must fill out Parts I through V for all filers and Part VI if it qualifies as a 501(c)(3) entity.
- Attach the necessary schedules as follows:
- Schedule A (for 501(c)(3) organizations)
- Schedule B (contributors)
- Schedule O (for explanations)
- Schedule A (for 501(c)(3) organizations)
- Submit electronically: The organization must use IRS-approved e-file providers to submit the completed Form 990-EZ.
- Retain records: The organization must keep copies of the filed return and all supporting documents for at least three years for public inspection.
Common Mistakes and How to Avoid Them
Filing Form 990-EZ requires accuracy and attention to IRS instructions. Many exempt organizations encounter avoidable errors that can cause delays, penalties, or even rejection of their returns. Understanding the most frequent mistakes helps ensure compliance and smoother processing.
The table below outlines several common filing issues and the proper steps to prevent them. Each point serves as a practical reminder to verify the form version, include all necessary attachments, use the correct filing method, and authorize the return properly before submission.
Common Mistake
How to Avoid It
Using the Wrong Form Year
Always use the 2024 version of the form, as the IRS will not accept prior years’ versions.
Missing Required Schedules
Review the form instructions carefully and attach all required schedules before submission.
Paper Filing
Ensure that the form is e-filed through an IRS-approved provider.
Failure to Sign the Return
Ensure the form is electronically signed by an authorized officer before submission.
What Happens After You File
Once Form 990-EZ is filed, the IRS typically processes the return within 4–6 weeks. If there are any issues, such as missing information or discrepancies, you will receive an IRS notice or letter requesting corrections. If the IRS identifies an error, it may assess penalties, including the maximum penalty for late filings.
If numerous nonprofits fail to submit accurate or complete returns, the IRS may revoke tax-exempt status after three consecutive years of non-filing. In such cases, relief options, including penalty abatement for reasonable cause, may be available for situations like natural disasters or unforeseen circumstances. Additionally, organizations may consult the IRS Form Help Center for access to related federal forms and guidance that support the resolution of compliance issues.
FAQs
What are the penalties for late filing of Form 990-EZ?
Late filing of Form 990-EZ may result in penalties based on the size of the organization. Nonprofits with gross receipts under $1,274,000 face a maximum penalty of $25 per day, up to $12,500 or 5% of gross receipts. It is crucial to file on time to maintain tax-exempt status and avoid additional fees.
Can I file paper returns for the 2024 Form 990-EZ?
No, for 2024, the IRS requires that all tax-exempt organizations file Form 990-EZ electronically. Paper returns are not accepted, and failure to comply with e-filing requirements may lead to penalties. Ensure that the form is submitted through an IRS-approved e-postcard or online site.
What should I do if I find an error after filing Form 990-EZ?
If an error is found after filing, you should file an amended return and explain the corrections on Schedule O. Be sure to check the "Amended return" box, and provide correct information to avoid penalties. The IRS may provide further guidance through its official link.
Do I need to amend state returns when I amend my federal Form 990-EZ?
In many cases, tax-exempt organizations must amend state returns if the federal Form 990-EZ is amended. Check with your state’s tax authority to ensure compliance with local regulations. The mission of the state’s tax office is to align with federal filings, though there may be slight differences.
Can penalties for late filing be waived?
Yes, penalty abatement may be requested if there is reasonable cause, such as income tax issues or unforeseen events like natural disasters. You can apply for abatement through the IRS portal or by writing a letter explaining your circumstances. Make sure to provide clear and complete details to support your case.
When is the 2024 Form 990-EZ due?
The deadline for Form 990-EZ is May 15, 2025, for tax-exempt organizations following a calendar year. If more time is needed, organizations can file for an extension using Form 8868, which will extend the deadline to August 15, 2025. Ensure that the extension is filed before the original due date to avoid penalties.
