Form 990-T Filing Checklist for Tax Year 2023
Overview and Applicability
The 2023 Form 990-T requires separate Schedule A forms for each unrelated trade or business. The Tax Cuts and Jobs Act applies a 21% flat corporate rate to organizations taxable as corporations. Trusts use graduated rates and may claim the section 199A deduction via Form 8995 or Form 8995-A.
The Inflation Reduction Act introduced elective payment provisions for certain clean energy credits. Tax-exempt organizations under sections 501(c), 401(a), 408(e), 408A, 220(e), 529(a), 529A, 530(a), or section 6417(d)(1)(A) with unrelated business taxable income must file. Organizations must track pre-2018 net operating losses (two-year carryback, twenty-year carryforward) separately from post-2017 net operating losses (80% limitation, indefinite carryforward).
Ten-Step Filing Process
Step 1: Confirm Filing Requirement and Organization Type
Verify that the organization qualifies to file for the calendar year 2023 or the applicable fiscal year. Mark the organization type in item G as a 501(c) corporation, 501(c) trust, 401(a) trust, or other trust. Check the appropriate box if filing a consolidated return with a 501(c)(2) title-holding corporation. Section 501(c)(3) organizations must not disclose Social Security numbers.
Step 2: Identify All Unrelated Business Activities
Identify all separate, unrelated trades or businesses conducted during 2023 and enter the total number in item H. Each activity requires its own Schedule A unless it is properly aggregated. Gather documentation including gross receipts, Forms W-2, 1099-NEC, 1099-MISC, 1099-K, partnership Schedule K-1s, returns and allowances, cost of goods sold records showing beginning inventory, purchases, labor, section 263A costs, and ending stock, operating expenses, depreciation using Form 4562, interest, taxes, rental income, and debt-financed property records. Segregate related and unrelated activities.
Step 3: Complete Schedule A for Each Business
Prepare a separate Schedule A for each business. Part I reports income including gross receipts less returns, cost of goods sold, gross profit, capital gains with Schedule D attached, Form 4797 gains, partnership income, rental income, debt-financed income, controlled organization income, investment income for section 501(c)(7), (9), or (17) organizations, exploited exempt activity income, advertising income, and other income. Total all income.
Part II captures deductions including officer compensation with a schedule, salaries and wages, repairs, bad debts, interest with schedules, taxes and licenses, depreciation from Form 4562 less amounts claimed elsewhere, depletion, deferred compensation contributions, employee benefits, and other deductions with schedules. Total all deductions.
Calculate income before specific deductions by subtracting deductions from income. Apply net operating loss deductions: pre-2018 NOLs offset income fully subject to carryback and carryforward limits, while post-2017 NOLs are limited to 80% with indefinite carryforward. Apply a specific deduction of generally $1,000, allocating it among the controlled group if applicable. Calculate unrelated business taxable income, ensuring it is zero or positive, as losses cannot offset other businesses.
Step 4: Aggregate Schedule A Results
Complete all Schedule A forms and verify accuracy. Confirm specific deduction allocation if the organization is part of a controlled group. Ensure each Schedule A shows zero or positive unrelated business taxable income. Sum unrelated business taxable income from all Schedule A forms for entry on the main form.
Step 5: Complete Part I and Calculate Charitable Contributions
Transfer the aggregated unrelated business taxable income from all Schedule A forms to Part I. Calculate the charitable contribution deduction limited to 10% of unrelated business taxable income before contributions are derived from unrelated businesses. Gather documentation verifying recipient qualifications under section 170 as 501(c)(3) organizations, government entities, or other qualified recipients. Enter the lesser of actual contributions or the limitation in Schedule A, Part II. Reduce aggregate unrelated business taxable income by allowable contributions.
Step 6: Calculate Tax Liability in Part II
Corporations multiply total unrelated business taxable income by 21% for regular taxes. Trusts use the 2023 trust rate schedule or Schedule D from Form 1041. Organizations subject to the proxy tax under section 6033(e) calculate it separately with schedules attached. Trusts determine alternative minimum tax if applicable. Include other taxes with forms attached and sum all tax components to calculate total tax before credits.
Step 7: Claim Credits in Part III
Attach Form 1118 for the corporate foreign tax credit or Form 1116 for the trust foreign tax credit. Attach Form 3800 for general business credits. Attach Form 8801 for the corporate minimum tax credit or Form 8827 for the trust minimum tax credit.
Organizations eligible for elective payment provisions under the Inflation Reduction Act may claim certain clean energy credits as payments. Do not claim prohibited credits. Sum the credits and subtract them from the tax before credits to calculate net tax.
Step 8: Report Other Taxes and Section 965 Liability
Complete recapture forms if applicable, including Form 4255 for investment credit, Form 8611 for low-income housing credit, Form 8697 for long-term contract interest, and Form 8866 for property depreciation interest. Report section 965 tax from Form 965-A or Form 965-B if applicable. Add net tax after credits, other taxes, and the section 965 tax to determine total tax liability.
Step 9: Report Payments and Calculate Balance
Enter the 2022 overpayment credited to 2023. Report all 2023 estimated payments, including quarterly installments calculated using Form 990-W. Enter Form 8868 extension deposits. Report foreign withholding and backup withholding with Forms 1099 attached. Include Form 2439 credit with Copy B attached and Form 4136 fuel tax credit. Total all payments and compare against total tax liability.
Step 10: Calculate Penalty, Complete Disclosures, and Sign
Complete Form 2220 if an underpayment exists for organizations with $500 or more in tax liability. Enter the penalty and attach the form. Calculate the balance due if the tax liability exceeds payments, or determine the overpayment if payments exceed the tax liability. Elect to credit the overpayment to 2024 or request a refund.
Complete Part IV by answering questions on at-risk limitations under section 465, excess business loss limitations under section 461(l), passive activity basis limitations under section 469, and aggregate unrelated business taxable income disclosure.
Complete Part V by reporting foreign financial accounts that may require FinCEN Form 114 with country names, foreign trust distributions requiring Form 3520 or Form 3520-A, and total tax-exempt interest received.
The authorized officer signs with their date and title. Item J requires a contact name and phone number. Indicate whether the IRS may discuss the return with the preparer. Paid preparers complete their section with signature, date, PTIN, firm information, and phone number.
Filing Requirements
Assemble the return with the main Form 990-T, all Schedule A forms, and supporting schedules including Forms 4562, Schedule D, Form 4797, cost of goods sold worksheets, and compensation schedules. Attach credit forms such as Forms 1118 or 1116, Form 3800, and Form 8801 or Form 8827, as well as Form 2220 if applicable, recapture forms, section 965 forms, elective payment documentation, and other required attachments.
Calendar-year organizations file by May 15, 2024. An automatic six-month extension may be requested using Form 8868, extending the filing deadline to November 15, 2024, but not the payment deadline. Section 401(a) trusts and IRAs file by the 15th day of the fourth month after the end of the year.
Consult the IRS “Where to File” page for the correct mailing address. Electronic filing is encouraged through approved software. Use the Electronic Federal Tax Payment System for all payments and do not mail payments with paper returns.
This checklist helps you correctly complete the 2023 Form 990-T, following the latest form layout, Inflation Reduction Act provisions, and tax rules for organizations that earn 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.
