Form 990-T Filing Checklist for Tax Year 2019
Overview and Applicability
The 2019 Form 990-T incorporates Tax Cuts and Jobs Act provisions, including the 21% corporate tax rate and modified net operating loss treatment. No Economic Impact Payment reconciliation, ACA shared responsibility payments, or pandemic-specific provisions apply to 2019. Organizations with multiple unrelated trades or businesses must compute unrelated business taxable income separately for each activity using Schedule M.
Tax-exempt organizations under sections 501(a), 408(e), 408A, 529(a), 220(e), or 530(a) with gross unrelated business income of $1,000 or more must file. Trustees of IRAs, SEP IRAs, SIMPLE IRAs, Roth IRAs, Coverdell ESAs, Archer MSAs, and HSAs file when accounts generate $1,000 or more of unrelated business income. Organizations liable for proxy tax on lobbying expenditures must also file.
Ten-Step Filing Process
Step 1: Identify Organization Type and Business Structure
Determine whether the organization is taxable as a corporation (line 40: 21% tax rate) or trust (line 41: trust tax rate schedule). Verify IRC section exemption status (line B: 501(a), 408(e), 408A, 529(a), 220(e), 530(a)) and organization type (line G: 501(a) corporation, 501(a) trust, 401(a) trust, or other trust). Confirm whether the organization was a subsidiary in an affiliated group or parent-subsidiary controlled group (line I). Enter unrelated business activity code (line E). If more than one unrelated trade or business exists, gather data for Schedule M completion for each additional business beyond the first.
Step 2: Gather Income Documentation
Collect all documentation for unrelated business income, including invoices, receipts, revenue reports, and bank statements. Obtain Forms 1099-MISC, 1099-INT, 1099-DIV, and Schedule K-1s from partnerships or S corporations.
Gather rental agreements for Schedule C completion, debt-financed property records for Schedule E, controlled organization payment documentation for Schedule F, investment statements for Schedules G, I, and J, and records supporting all income categories. Prepare beginning and ending inventory records, purchase invoices, payroll records for direct labor, and section 263A costs for Schedule A completion.
Step 3: Complete Part I Income Reporting
Record gross receipts on line 1a, less returns and allowances on line 1b, with the balance on line 1c. Complete Schedule A for cost of goods sold and enter line 7 total on Part I, line 2. Calculate gross profit by subtracting line 2 from line 1c on line 3. Attach Schedule D for capital gains and report capital gain net income on line 4a. Report net gains or losses from Form 4797, Part II, line 17, on line 4b. Trusts claim capital loss deductions on line 4c.
Report partnership and S corporation income on line 5 with statements attached. Complete and report rental income (Schedule C, line 6); debt-financed income (Schedule E, line 7); controlled organization income (Schedule F, line 8); section 501(c)(7), (9), or (17) investment income (Schedule G, line 9); exploited exempt activity income (Schedule I, line 10); advertising income (Schedule J, line 11); and other income with schedules (line 12). Sum lines 3 through 12 on line 13 for total income.
Step 4: Document and Report Deductions
Part II permits only deductions directly connected with unrelated business income. Complete Schedule K for officer, director, and trustee compensation, and enter it on line 14. Gather W-2s and payroll records for salaries and wages (line 15). Document repairs and maintenance with invoices (line 16).
Prepare bad debt schedules and aging reports (line 17). Attach interest schedules showing loan documentation (line 18). Report taxes and licenses with supporting payment records (line 19). Complete Form 4562 for depreciation and report total on line 20, reducing by amounts claimed on Schedule A or elsewhere (line 21a), with net depreciation on line 21b. Calculate depletion with reserve schedules (line 22).
Document contributions to deferred compensation plans (line 23) and employee benefit programs (line 24). Transfer excess exempt expenses from Schedule I to line 25 and excess readership costs from Schedule J to line 26. Attach schedules for other deductions on line 27. Total all deductions from lines 14 through 27 on line 28.
Step 5: Calculate Unrelated Business Taxable Income Before NOL
Subtract line 28 from line 13 to compute unrelated business taxable income before net operating loss deduction on line 29. For organizations with multiple businesses, complete this calculation on the main Form 990-T for the first business and on separate Schedule M forms for each additional business.
Step 6: Apply Net Operating Loss Deductions
Deduct post-2017 net operating losses arising in tax years beginning on or after January 1, 2018, on line 30 with computation schedules attached. These losses carry forward indefinitely but cannot exceed 80% of taxable income under TCJA limitations. Subtract line 30 from line 29 to obtain unrelated business taxable income on line 31. This amount transfers to Part III for aggregation with other business activities or continues through single-business calculations.
Step 7: Compute Total UBTI and Apply Deductions
Part III aggregates results. Line 32 reports total unrelated business taxable income from all businesses (a single business enters line 31; multiple businesses sum line 31 from Form 990-T and all Schedule M forms).
Report disallowed fringe amounts on line 33 (qualified transportation fringes excluded for 2019). Claim charitable contribution deductions subject to percentage limitations on line 34. Calculate the total before pre-2018 NOLs on line 35 by subtracting line 34 from the sum of lines 32 and 33. Deduct pre-2018 net operating losses on line 36 with schedules attached.
Calculate the total before specific deduction on line 37 by subtracting line 36 from line 35. Apply a specific deduction generally equal to $1,000 on line 38 (verify exceptions in instructions). Subtract line 38 from line 37 on line 39 for final unrelated business taxable income (enter zero if line 38 exceeds line 37).
Step 8: Calculate Tax Liability
Part IV determines tax based on organization type. Corporations multiply line 39 by 21% and enter on line 40. Trusts calculate tax using applicable rate schedules or Schedule D from Form 1041 and report on line 41. Compute proxy tax under section 6033(e) if applicable with supporting computations and enter on line 42.
Trusts compute an alternative minimum tax when applicable and report it on line 43. Calculate tax on noncompliant facility income per instructions and enter on line 44. Total lines 42, 43, and 44, then add to line 40 or 41 as applicable on line 45.
Step 9: Claim Credits and Report Other Taxes
Attach Form 1118 for corporate foreign tax credit or Form 1116 for trust foreign tax credit and report on line 46a. Document other allowable credits on line 46b. Attach Form 3800 for general business credit and report on line 46c.
Attach Form 8801 or Form 8827 for prior year minimum tax credit and report on line 46d. Total credits from lines 46a through 46d on line 46e. Subtract line 46e from line 45 on line 47. Report other taxes from Forms 4255, 8611, 8697, or 8866 with forms attached on line 48. Add lines 47 and 48 on line 49 for total tax. Report 2019 net section 965 tax liability from Form 965-A or Form 965-B Part II column (k) line 3 on line 50.
Step 10: Report Payments and Determine Balance
Part V captures all payments and credits. Report the 2018 overpayment credited to 2019 on line 51a. Document 2019 estimated tax payments made throughout the year on line 51b. Report the tax deposited with the Form 8868 extension on line 51c. Foreign organizations report tax paid or withheld at source on line 51d. Report backup withholding on line 51e.
Attach Form 8941 for small employer health insurance premium credit on line 51f. Report other credits, including Form 2439, Form 4136, and the refundable minimum tax credit from Form 8827 (with “F8827” notation) on line 51g with the total calculated. Sum lines 51a–51g on line 52 for total payments.
Compute the estimated tax penalty on line 53, attaching Form 2220 if applicable. Determine tax due on line 54 when line 52 is less than the total of lines 49, 50, and 53. Calculate overpayment on line 55 when line 52 exceeds the total of lines 49, 50, and 53. Apply an overpayment to the 2020 estimated tax or request a refund on line 56.
Additional Requirements and Disclosure
Part VI requires specific disclosures. Line 57 asks whether the organization held interest in or signed authority over foreign financial accounts during 2019, potentially requiring a FinCEN Form 114 filing with the foreign country's name entered. Line 58 inquires about distributions from, grantor status of, or transferor status to foreign trusts triggering additional form requirements. Line 59 captures total tax-exempt interest received or accrued during the year.
Signature and Filing Procedures
Authorized officers must sign under penalties of perjury and provide the date and title. Organizations may authorize IRS discussion with preparers by checking the appropriate box. Paid preparers must sign, date, provide PTIN, determine self-employment status if applicable, and include firm name, employer identification number, address, and telephone number.
Most organizations file by the 15th day of the 5th month after tax year end. IRAs, Roth IRAs, Coverdell ESAs, and Archer MSAs file by the 15th day of the 4th month. When due dates fall on weekends or legal holidays, file the next business day. Form 8868 provides automatic extensions but does not extend payment deadlines.
Mail returns to Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0027. Use approved private delivery services with appropriate street addresses. All tax payments require Electronic Federal Tax Payment System deposits submitted by 8 p.m. Eastern time the day before due dates.
Organizations with gross income exceeding $10,000 complete all applicable schedules. Those with $10,000 or less complete the heading, Part I lines 1–13 column A, Part I line 13 for columns B and C, Part II lines 28–31, Parts III through VI, and signature area without detailed schedules.
This comprehensive ten-step checklist ensures accurate Form 990-T completion for 2019, maintaining compliance with all applicable tax provisions and IRS requirements for exempt organizations with unrelated business income.
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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.
