What IRS Form 990-T (2020) Is For

Form 990-T is used by tax-exempt organizations to report unrelated business income tax (UBIT) and calculate any tax owed on income from activities not substantially related to their exempt purposes. Organizations must file if they have $1,000 or more in gross income from regularly conducted unrelated trade or business activities (IRS Instructions for Form 990-T (2020)).

When You’d Use Form 990-T for 2020 (Late or Amended Filing)

You may need to file Form 990-T for 2020 as a late or amended return if you received IRS notices about unfiled returns, owe taxes on previously unreported unrelated business income, or need to correct errors on an originally filed return. Refund or correction claims generally must be filed within three years of the original due date or filing date.

Key Rules Specific to 2020

• Mandatory electronic filing began in February 2021 for most filers, with limited paper exceptions.
  
  
• Form 990-T was redesigned, requiring separate Schedule A for each unrelated business, with NAICS codes.
  
  
• “Siloing” rules prevent offsetting losses between businesses; each must be reported separately.
  
  
• CARES Act allowed special five-year NOL carrybacks for losses arising in 2018–2020.
  
  

Step-by-Step (High Level)

1. Gather IRS transcripts using Form 4506-T to confirm filing history.
   
   
2. Complete the 2020 version of Form 990-T, including redesigned Schedule A for each unrelated trade or business.
   
   
3. Attach required schedules and statements, including detailed explanations for amended returns.
   
   
4. File electronically or by paper only if exceptions apply.
   
   
5. Retain complete copies of returns, schedules, and supporting records.
   
   

Common Mistakes and How to Avoid Them

• Failing to file electronically when required.
  
  
• Omitting Schedule A forms for each unrelated trade or business.
  
  
• Including Social Security Numbers on publicly disclosed 501(c)(3) returns.
  
  
• Mixing profitable and loss activities in violation of siloing rules.
  
  
• Failing to report COVID-19 payroll credits properly.
  
  
• Not including detailed explanations for amended return changes.
  
  

What Happens After You File

The IRS processes returns and separately calculates penalties and interest, billing them later. Amended or late returns often take longer to process. Organizations may request installment agreements using Form 9465 if they cannot pay in full. Public charities must make returns available for public inspection for three years. Taxpayers retain appeal rights against IRS assessments or determinations.

FAQs

What penalties apply for late filing a 2020 Form 990-T?

Late filing penalties are 5% of unpaid tax per month, capped at 25%. If filed over 60 days late, the minimum penalty is $435 or the tax due, whichever is smaller. Late payment adds 0.5% monthly, also capped at 25%. Interest accrues daily from the original due date, regardless of extensions.

Can I still get transcripts for unfiled 2020 returns?

Yes. You can request account transcripts using Form 4506-T or IRS online tools. Transcripts reveal filing history, payments, and third-party-reported income. They help identify missing obligations and prevent duplicate filings. Even unfiled years remain on record with the IRS, making transcripts a valuable tool before preparing late or amended returns.

How do the new siloing rules affect NOL carryforwards?

NOLs from 2018 onward must be siloed, meaning they can only offset income from the same unrelated business. Post-2017 NOLs can be carried forward indefinitely but limited to 80% of taxable income. The CARES Act temporarily allowed carrybacks for 2018–2020 losses, letting organizations offset earlier-year taxable income before siloing rules applied.

Is there a refund statute of limitations for 2020?

Yes. Refund claims must generally be filed within three years of the original due date or filing date, whichever is later. For most 2020 returns due May 17, 2021, the refund deadline was May 17, 2024. Some exceptions exist for carryback claims or IRS-granted extensions. Late filing doesn’t extend refund rights.

Do I need to file amended state returns too?

Possibly. Many states conform to federal UBIT rules and require amended returns when federal forms are amended, especially if UBIT amounts change. Others may automatically adjust. Check with your state tax authority or consult a tax professional to determine specific state requirements and deadlines when filing an amended federal Form 990-T.

Can I request an extension for late 2020 filing?

Extensions are only valid when filed by the original deadline, so late returns cannot be extended. However, organizations may seek penalty abatement if they can demonstrate reasonable cause, such as reliance on professional advice, illness, or disaster-related disruptions. Filing as soon as possible helps minimize ongoing penalties and supports abatement requests.

What if I discover additional unrelated business income after filing?

File an amended Form 990-T for 2020, checking the “Amended Return” box, and include detailed statements explaining changes. Amended returns allow corrections within three years of the original due date or filing. The IRS will review and adjust tax, penalties, or refunds accordingly. Proper documentation ensures processing and compliance with reporting requirements.

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