What the Form Is For

Form 990-EZ is the annual information return that smaller tax-exempt organizations use to report their financial activities, programs, and governance to the Internal Revenue Service. Think of it as your organization's yearly "report card" that shows the government—and the public—how your nonprofit operates and uses its resources.

Unlike the longer Form 990, the 990-EZ is designed as a simplified version for organizations that meet specific size requirements. It covers essential information about your revenue, expenses, assets, programs, officers, and compliance with tax laws. The form serves multiple purposes: it satisfies IRS reporting requirements, maintains your tax-exempt status, and provides transparency to donors and the public who want to know how your organization operates.

For the 2010 tax year, this form is specifically for tax-exempt organizations described under section 501(c) of the Internal Revenue Code (such as charitable, educational, religious, and social welfare organizations), certain political organizations under section 527, and nonexempt charitable trusts described in section 4947(a)(1). IRS.gov

When You’d Use It (Late/Amended)

Regular Filing

You must file Form 990-EZ by the 15th day of the 5th month after your organization's tax year ends. For calendar-year organizations, that's May 15th. If your fiscal year ends at a different time, count five months from that date. If the due date falls on a weekend or holiday, file on the next business day. IRS.gov

Late Filing

If you miss the deadline, file as soon as possible and attach a statement explaining why you're late. The IRS will assess a penalty of $20 per day for late filing (up to $10,000 or 5% of your gross receipts, whichever is smaller). For larger organizations with annual gross receipts exceeding $1 million, the penalty increases to $100 per day with a maximum of $50,000. Missing the deadline for three consecutive years triggers automatic revocation of your tax-exempt status—a serious consequence that means your organization would owe income taxes.

Extensions

You can request an automatic six-month extension by filing Form 8868 before your original due date. This extends your deadline but doesn't extend the time to pay any taxes owed.

Amended Returns

If you discover errors after filing, you can submit an amended Form 990-EZ at any time. Check the "Amended return" box at the top of the form and include Schedule O explaining what you changed and why. The amended return must be complete—not just the corrections—and must be made available for public inspection for three years. State law may also require you to send amended returns to state agencies where you originally filed. IRS.gov

Key Rules for 2010

Eligibility Requirements

You can file Form 990-EZ only if your organization meets both of these criteria:

• Gross receipts less than $200,000 for the tax year
• Total assets less than $500,000 at year-end

This represents a major change from 2009, when the thresholds were $500,000 in gross receipts and $1.25 million in assets. Organizations exceeding either threshold must file the full Form 990 instead. IRS.gov

Very Small Organizations

If your organization normally has gross receipts of $50,000 or less (increased from $25,000 in prior years), you may file the simpler Form 990-N (e-Postcard) instead, unless you choose to voluntarily file Form 990-EZ or are a supporting organization under section 509(a)(3).

Mandatory Full Form 990 Filers

Certain organizations must file Form 990 regardless of size, including:

• Organizations that operate hospital facilities
• Sponsoring organizations of donor-advised funds
• Certain controlling organizations under section 512(b)(13)
• Organizations filing group returns

Three-Year Auto-Revocation Rule

Starting in 2010, failing to file for three consecutive years results in automatic loss of tax-exempt status. This is a critical new enforcement mechanism.

Schedule O Requirement

For 2010, you must use Schedule O (Supplemental Information) to provide narrative responses for multiple lines on Form 990-EZ, rather than attaching separate documents. This standardizes how organizations explain their activities and answers. IRS.gov

Step-by-Step Filing (High Level)

Step 1: Determine Eligibility

Before starting, confirm your gross receipts are under $200,000 and total assets under $500,000. Check that you're not required to file Form 990 due to operating a hospital, managing donor-advised funds, or other special circumstances.

Step 2: Gather Financial Records

Collect your year-end financial statements, balance sheet, records of all revenue sources (contributions, program service revenue, fundraising events, investments), expense records organized by category, and information about compensation paid to officers and key employees.

Step 3: Complete the Core Form

Fill out Parts I through VI completely:

• Part I: Report all revenue and expenses, showing the change in your net assets
• Part II: Complete your balance sheet showing assets and liabilities at year-end
• Part III: Describe your program service accomplishments (what your organization actually does)
• Part IV: List officers, directors, trustees, and key employees with their compensation
• Part V: Answer questions about governance, activities, and compliance
• Part VI: (Section 501(c)(3) organizations only) Answer additional questions about public charity status and activities

Step 4: Complete Required Schedules

Depending on your activities, attach necessary schedules:

• Schedule A: Required for all 501(c)(3) organizations to document public charity status
• Schedule B: Required if you received contributions of $5,000 or more from any contributor
• Schedule C: Required if you engaged in lobbying or political campaign activities
• Schedule E: Required for private schools
• Schedule G: Required if you had $15,000 or more in fundraising events or gaming income
• Schedule L: Required if you had certain transactions with officers or interested persons
• Schedule N: Required for final returns or significant asset dispositions
• Schedule O: Use for required narrative explanations throughout the form

Step 5: Review for Completeness

Answer every applicable question, enter zero where appropriate rather than leaving blanks, ensure all amounts are in whole dollars (rounded), verify all required schedules are attached, and double-check that officer signatures are included.

Step 6: File and Retain Copies

Mail to the IRS address shown in instructions (Ogden, UT for most organizations). Keep copies of the complete return and all attachments for at least three years for public inspection requirements. Consider filing electronically for faster processing. IRS.gov

Common Mistakes and How to Avoid Them

Incomplete Returns

The most frequent error is leaving required fields blank or omitting required schedules. The IRS treats incomplete returns as failures to file, triggering penalties.
Solution: Answer every question, enter "0" when an amount is zero, and use "N/A" only when specifically instructed. Complete all required schedules based on your activities.

Incorrect Gross Receipts Calculation

Some organizations mistakenly report net revenue instead of gross receipts, particularly by subtracting fundraising expenses from contribution income.
Solution: Report all revenue at gross amounts before expenses. Use the specific line items provided for expenses separately.

Missing Schedule O Narratives

Starting in 2010, certain questions require explanations in Schedule O rather than separate attachments. Missing these narratives makes your return incomplete.
Solution: Review the instructions for lines 8, 10, 16, 20, 24, 26, 31, 33, 34, and 35 to determine if Schedule O responses are required.

Wrong Compensation Reporting

Organizations confuse the two reporting options (calendar-year Form W-2/1099 method vs. fiscal-year book method) or mix them.
Solution: Choose one compensation reporting method and apply it consistently to all individuals listed. Most smaller organizations find Option 1 (W-2/1099 method) simpler.

Forgetting Required Schedules

Many organizations overlook Schedule A (required for all 501(c)(3) organizations) or Schedule B (required for substantial contributions).
Solution: Use the checklist in the instructions to identify which schedules apply to your situation.

Not Planning for Public Disclosure

Organizations sometimes include confidential information that will become public.
Solution: Remember that nearly everything on Form 990-EZ (except certain Schedule B donor information) is publicly available. Avoid including Social Security numbers, sensitive personal information, or proprietary details.

Filing When Ineligible

Some organizations file 990-EZ when their gross receipts or assets exceed the thresholds, or when they operated a hospital or managed donor-advised funds.
Solution: Carefully check the 2010 thresholds ($200,000 gross receipts, $500,000 assets) and special mandatory Form 990 situations before beginning. IRS.gov

What Happens After You File

Public Disclosure

Your completed Form 990-EZ, along with all schedules and attachments (except certain Schedule B contributor information), becomes a public document. The IRS makes it available online, and your organization must provide copies to anyone who requests them at your principal office during regular business hours. You can charge a reasonable copying fee but must respond promptly to requests. This transparency allows donors, grantmakers, watchdog groups, and the public to evaluate your organization.

IRS Processing

The IRS reviews your return for completeness and compliance. While most returns are simply processed, some are selected for examination. The IRS may contact you if information is missing, unclear, or raises questions about your tax-exempt status or activities.

State Filing

Many states accept Form 990-EZ to satisfy their charitable organization reporting requirements. However, you may need to file copies with your state attorney general, secretary of state, or department of revenue depending on your state's laws. Most states require the same accrual-basis reporting the IRS accepts.

Three-Year Retention

You must keep copies of your return and make them available for public inspection for three years from the filing date (or three years from the due date, whichever is later). This applies to both original and amended returns.

Maintaining Exempt Status

Successfully filing Form 990-EZ each year is essential to maintaining your tax-exempt status. The new automatic revocation rule means that failing to file for three consecutive years will result in loss of exemption without additional notice. Once revoked, your organization would need to reapply for exempt status and could owe taxes for the period it was not exempt.

Form 990-T Obligation

If your organization had $1,000 or more of unrelated business income, you must also file Form 990-T and pay tax on that income, even if you properly filed Form 990-EZ. IRS.gov

FAQs

Q: Can we file Form 990-EZ if our gross receipts are $190,000 but our assets are $600,000?

A: No. You must meet both requirements. With assets of $600,000, you exceed the $500,000 threshold and must file the full Form 990 instead.

Q: We missed the filing deadline by two weeks. What should we do?

A: File immediately and attach a statement explaining the reason for the delay. The IRS will assess a penalty of $20 per day, but filing quickly limits the damage. You can request penalty abatement for reasonable cause, such as a natural disaster, serious illness, or unavoidable absence of key personnel. IRS.gov

Q: Do we need to hire an accountant to prepare Form 990-EZ?

A: It's not required, but many organizations find professional help valuable. While Form 990-EZ is simpler than Form 990, it still requires accurate financial reporting and understanding of tax-exempt organization rules. Using a paid preparer doesn't relieve your organization's responsibility to file a complete and accurate return.

Q: What's the difference between Form 990-EZ and Form 990-N (e-Postcard)?

A: Form 990-N is a very short electronic notice for organizations with gross receipts normally $50,000 or less. It requires only basic information like your organization's name, address, and EIN. Form 990-EZ is more comprehensive, requiring detailed financial and program information, and is for organizations with gross receipts between $50,000 and $200,000 (with assets under $500,000). IRS.gov

Q: Can the public see our donors' names on Schedule B?

A: It depends. For section 527 political organizations, Schedule B is fully public. For most other organizations, Schedule B donor names and addresses are generally not disclosed to the public, though the IRS can see them. However, there are exceptions for certain organizations that don't meet donee disclosure requirements.

Q: We changed from a calendar year to a fiscal year ending June 30. Which form do we use?

A: File a short-period return using Form 990-EZ for the transition period, and mark "Change of Accounting Period" at the top. If you've changed accounting periods within the previous 10 years, you may also need to attach Form 1128.

Q: Our organization dissolved in 2010. Do we still file Form 990-EZ?

A: Yes. File a final return, check the "Final return" box in the header, and complete Schedule N (Liquidation, Termination, Dissolution, or Significant Disposition of Assets). The final return is due by the 15th day of the 5th month after dissolution. This formally closes your organization's tax-exempt status with the IRS. IRS.gov

Source: This summary is based on official IRS instructions and guidance available at IRS.gov. For specific situations, consult the complete Form 990-EZ instructions or a tax professional experienced with exempt organizations.

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