Form 990 Tax Year 2022 Compliance Checklist
Understanding 2022 Form 990 Requirements
The 2022 Form 990 reflects significant changes introduced by IRS Announcement 2021-18, which became effective for returns filed for tax years beginning January 1, 2022. This announcement revoked prior guidance and mandates stricter compensation reporting requirements. Organizations must now report compensation paid to management companies for services performed by common-law employees as direct compensation to those employees rather than to the management company.
Form 990 applies exclusively to tax-exempt organizations under section 501(c), nonexempt charitable trusts under section 4947(a)(1), and section 527 political organizations. No stimulus reconciliation, tax credit provisions, or energy credit reporting apply to this nonprofit information return for the 2022 tax year.
Filing Threshold and Form Determination
Organizations must file Form 990 when gross receipts reach $200,000 or more, or when total assets equal $500,000 or more at the end of the year. Both thresholds operate independently—meeting either threshold triggers the filing requirement. Organizations falling below both thresholds may file Form 990-N electronically unless they voluntarily choose to file Form 990 or 990-EZ.
Section 509(a)(3) supporting organizations face unique requirements. These entities must file Form 990 regardless of their gross receipts or total asset amounts. This mandatory filing requirement applies even when receipts fall well below standard thresholds.
Private foundations are required to use Form 990-PF instead of Form 990. Organizations holding disregarded entities or controlling tax-exempt or taxable entities are required to complete the full Form 990, as they cannot file the shorter Form 990-EZ.
Ten-Step Compliance Process
Step 1: Confirm Filing Obligation and Form Type
Verify that your organization meets the filing threshold by calculating gross receipts for the 2022 tax year and determining total assets as of December 31, 2022. Organizations with gross receipts below $200,000 and total assets below $500,000 may submit Form 990-N unless they are section 509(a)(3) supporting organizations.
Confirm your organization is not classified as a private foundation, which would require Form 990-PF instead. Section 527 political organizations must file if they have $25,000 or more in gross receipts. Qualified state and local political organizations are required to file only if their gross receipts reach $100,000 or more.
Step 2: Compile Financial Records and Compensation Documentation
Gather your complete 2022 year-end balance sheet, income statement, and reconciliation of net assets. Collect all Forms W-2 and 1099-NEC issued to officers, directors, trustees, and key employees. Identify key employees by applying the $150,000 threshold for reportable compensation from your organization and related organizations combined. List up to 20 individuals meeting this definition.
Find the five employees who made the most money from your organization and related organizations combined, not including officers, directors, trustees, or key employees. These employees must have made $100,000 or more in reportable compensation.
Step Three: Describe Programs and Identify Required Schedules
Draft a concise mission statement of one to two sentences describing your organization’s tax-exempt purpose. Identify and describe your three most extensive program services by total expenses. For each program service, calculate and report total costs and any corresponding program revenue generated.
Complete Part IV of Form 990, answering all 38 checklist questions to determine which schedules your organization must complete. Every organization filing Form 990 must complete Schedule O without exception, regardless of activities or responses.
Step 4: Report Compensation Under 2022 Rules
List all current officers, directors, and trustees who held positions during any portion of 2022, regardless of whether they received compensation. Include voting rights status and hours worked per week for each listed individual.
Report up to 20 key employees who meet the compensation threshold. Key employees are individuals with reportable compensation of $150,000 or more from your organization and related organizations combined who exercise significant influence over organizational affairs.
List the five highest compensated employees, excluding officers, directors, trustees, and key employees who received $100,000 or more in reportable compensation. Apply IRS Announcement 2021-18 rules by reporting compensation paid to management companies for common-law employee services as compensation to the employee directly, not to the management company. Include amounts from Form W-2, box 1, and Form 1099-NEC, box 1.
Step 5: Complete Revenue and Expense Statements
Report all revenue sources in Part VIII using the prescribed categories. Enter contributions and grants on line 1h. Report program service revenue on line 2 G with the appropriate business codes. Document investment income, including interest, dividends, and capital gains, on the designated lines.
If your organization has unrelated business gross income of $1,000 or more, report this amount on line 7a and prepare Form 990-T separately to report unrelated business taxable income and calculate any tax due.
Allocate all expenses in Part IX across three functional categories: program services, management and general, and fundraising. Use reasonable allocation methods that are consistently applied. Ensure that total costs reported in Part IX, line 25, column A, exactly equal the total costs shown in Part I, line 18.
Step 6: Prepare Balance Sheet and Reconciliation
Complete Part X by reporting beginning-of-year amounts in column A and end-of-year amounts in column B. Include all cash accounts, pledges and grants receivable net of allowances, accounts receivable net of allowances, loans to interested persons, investments at fair market value, and land, buildings, and equipment net of accumulated depreciation.
Report all liabilities, including accounts payable, grants payable, deferred revenue, tax-exempt bond liabilities, and other obligations. Calculate total assets on line 16 and total liabilities on line 26.
Organizations following Financial Accounting Standards Board ASC 958 should report net assets without donor restrictions and net assets with donor restrictions on lines 27 and 28. Complete Part XI reconciliation to demonstrate how revenue and expense changes during the year affected the balance sheet.
Step 7: Complete Activity-Based Schedules
Schedule I, Parts I and II are required when your organization reports more than $5,000 in grants or assistance to domestic organizations or domestic governments in Part IX, line 1, column A. Schedule I, Parts I and III are required when aggregate grants or assistance to domestic individuals exceed $5,000, as shown in Part IX, line 2, column A.
Schedule F, Part I, applies when your organization has more than $10,000 in foreign revenues or expenses or more than $100,000 in foreign investments. Complete Schedule F Parts II or III when grants exceeding $5,000 are made to specific foreign organizations or individuals.
Schedule G Part I is required when professional fundraising expenses exceed $15,000, as shown in Part IX, column A, lines six and 11e combined. Schedule M must be completed when noncash contributions total more than $25,000 during the tax year, as reported in Part VIII, line 1g.
Schedule B is required for all organizations filing Form 990 to report contributors who have made substantial contributions. However, donor names and addresses may not need to be submitted to the IRS, depending on your organization's type, under current regulations.
Step 8: Disclose Transactions With Interested Persons
Complete Schedule L, Part I, to report all excess benefit transactions involving disqualified persons, including officers, directors, trustees, key employees, and substantial contributors. These transactions must be reported regardless of dollar amount.
Report all outstanding loans to or from interested persons as of December 31, 2022, in Part II of Schedule L. Include loan balances, interest rates, repayment terms, and security or collateral.
Part III requires the reporting of grants or assistance to interested persons who meet specific thresholds. Complete Part IV when business transactions with interested persons meet reporting criteria: all payments during the year exceeded $100,000, or all costs from a single transaction exceeded the greater of $10,000 or one percent of total revenue for the year.
Step 9: Address Governance and Public Disclosure
Answer all governance questions in Part VI, lines 1 through 19. Report the number of voting members of your governing body on line 1a and the number of independent voting members on line 1b. Independent members have no family or business relationships with officers or key employees of the organization.
Respond to questions about conflicts of interest policies, whistleblower policies, document retention policies, and processes for reviewing Form 990 before filing. Document whether your governing documents, conflict of interest policy, and financial statements are available to the public.
Provide explanations on Schedule O for each yes answer to lines 2 through 7b and each no answer to lines 8a, 8b, or 10b. Organizations cannot claim compliance with policies adopted after the 2022 year-end but before filing the return. Policies must have been in place during the tax year to answer yes for that year.
Step 10: Review, Sign, and File
Verify that an authorized officer signs and dates the return under penalty of perjury in Part II. Authorized signers typically include the president, executive director, treasurer, or other officer with legal authority to sign on behalf of the organization. If you are using a paid preparer, please ensure that they sign and date the form and include their Preparer Tax Identification Number.
Confirm that no Social Security numbers appear anywhere on Form 990, its schedules, or attachments. The law requires the public disclosure of filed returns, and Social Security numbers cannot be redacted before public release.
Maintain copies of all supporting documentation, including Forms W-2 and 1099, bank statements, investment records, grant agreements, board minutes, and conflict of interest disclosures for at least three years. File your complete return with all required schedules by the 15th day of the fifth month following the close of your 2022 tax year. Calendar-year filers must submit returns by May 15, 2023, unless an extension was granted through Form 8868.
Key 2022 Changes and Clarifications
Management Company Compensation Reporting
IRS Announcement 2021-18 eliminated the alternative reporting method previously allowed under Announcement 2001-33. Organizations that pay management companies for services performed by common-law employees must now report the compensation as paid to the individual employee, rather than to the management company. This change ensures transparency in executive and key employee compensation reporting.
Schedule O Universal Requirement
All organizations filing Form 990 are required to complete Schedule O, which provides supplemental information and narrative explanations. This requirement applies universally regardless of the organization’s section 501(c) classification. Use Schedule O to explain yes answers in Part VI governance questions, provide the required Part III program service narratives, and describe determinations made in Part IV regarding schedule requirements.
Filing Parameters and Limitations
Organizations filing Form 990 cannot omit required schedules based on activity thresholds. When Part IV checklist responses indicate a schedule is necessary, that schedule must be completed and submitted with the return.
Section 527 political organizations follow modified filing requirements. These organizations must file Form 990 when gross receipts reach $25,000 or more, but are not required to complete all parts and schedules applicable to section 501(c)(3) organizations. Their reporting focuses on political activities and related disclosures.
Nonexempt charitable trusts described in section 4947(a)(1) must complete all parts and schedules required of section 501(c)(3) organizations. These trusts follow the exact comprehensive reporting requirements as public charities for governance, programs, and financial activities.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
