(Updated 2025) To help smaller nonprofit organizations, IRS has a more simplified e-Postcard, Form 990-N rather than the Form 990-EZ or the Standard Form 990. The new guidance lets more nonprofits with lower annual income file using Form 990-N if they have $50,000 or less in gross annual receipts.
2010 Tax Year and later
(Filed in 2011 and later)
Private Foundations of any size 990-PF
Gross Receipts Normally ‰¤ $50,000 990-N
Gross receipts < $200,000, and 990-EZ
Total assets < $500,000
Gross receipts ‰¥ $200,000, or 990
Total assets ‰¥ $500,000
This helps non-profit organizations save time and avoid trouble with federal income tax. Simple mistakes with forms like the 990 postcard or Form 990-N may even put a group’s tax-exempt status at risk.
This blog post will explain who can now use Form 990-N, why these updates matter for your tax return, and show clear steps to stay compliant. Read on to see how your organization can benefit from these easier filing rules—your next deadline could get simpler than you think!
Key Takeaways
- The IRS now lets more small nonprofits file Form 990-N (the “e-Postcard”) if they have $50,000 or less in gross yearly receipts. This rule started for tax years after January 1, 2010.
- Before this change, only groups with $25,000 or less could use Form 990-N. The higher $50,000 cutoff helps small charities and public charities save time and money.
- Private foundations still cannot use Form 990-N. They must file the longer Form 990-PF every year no matter how little money they make.
- Groups with more than $50,000 but less than $200,000 in receipts (and under $500,000 in assets) can use Form 990-EZ. Bigger groups must file the full Form 990.
- Filing late or sending incomplete forms can lead to fines or loss of tax-exempt status—even three missed filings mean you lose it automatically. Always check IRS rules to stay safe from penalties.
IRS Guidance on Form 990-N Filing
The Internal Revenue Service has made it easier for more nonprofit organizations to use the 990-N filing—a simple online form. These updates can help smaller public charities, private foundations, and section 501(c)(3) groups keep their tax exemption without a heavy paperwork load.
Expansion of Eligibility for Tax-Exempt Organizations
Most tax-exempt organizations with gross annual receipts of $50,000 or less now qualify to file Form 990-N, also called the “e-Postcard.” This change started for tax years beginning on or after January 1, 2010.
It follows Revenue Procedure 2011-15 from the IRS.
Organizations under section 501(c), including public charities and nonprofit corporations, benefit from this update. Supporting organizations still cannot use Form 990-N no matter their size or receipts.
This expanded eligibility helps many small nonprofits stay in compliance with tax laws and keep their tax exemption status easier than before.
Increase in Threshold for Gross Annual Receipts
The Internal Revenue Service (IRS) raised the gross annual receipts threshold for filing Form 990-N. Now, a charitable organization or public charity with gross receipts of $50,000 or less may file Form 990-N instead of Forms 990 or 990-EZ.
Before this change, the cut-off was only $25,000. The new rule applies for tax years beginning on or after January 1, 2010.
This increase helps many smaller nonprofits and donor-advised funds avoid complex filings. It also reduces their compliance work and costs linked to employee benefit paperwork and payroll forms.
Private foundations still must file Form 990-PF if required by section 501(c)(3) of the internal revenue code. Next is an overview of who needs to file which form under these new rules.
Form Filing Requirements
Non-profits need to know which forms the IRS requires for their group and activities. Filing the right form matters, whether you run a charitable trust or handle donations through limited liability companies.
Filing Requirements for Private Foundations
Private foundations, no matter their size or income, must file Form 990-PF every year. The Internal Revenue Service does not allow private foundations to use the shorter Form 990-N.
This rule applies even if their gross receipts fall under the higher threshold set for other tax-exempt organizations.
Form 990-PF asks about grants, charitable activities, investments in securities, and unrelated business income. It covers deductions, dividends, contracts with employees or limited liability companies, fundraising events selling cookies or merchandise, and any property tax paid.
Failure to submit this return on time can lead to loss of tax-exemption and extra penalties related to corporate tax rates and compliance issues.
Filing Requirements for Organizations with Gross Receipts
After discussing the filing rules for private foundations, we focus on groups with gross receipts. Groups with $50,000 or less in gross receipts can now file Form 990-N. This “e-Postcard” is quick to complete and keeps their tax-exempt status active.
It applies to most section 501(c)(3) organizations, as well as some limited liability companies and other non-profit sector entities.
Groups earning more than $50,000 but less than $200,000 in gross receipts—and with assets under $500,000—may use Form 990-EZ. Larger groups must submit the full Form 990 return of organization exempt from income tax through irs.gov.
Tax-deductible status depends on keeping up with these IRS forms each year; late or missing filings can harm deductibility and expose organizations to taxation or loss of philanthropic benefits such as tax exemptions under UBIT (unrelated business income tax) rules.
Penalties and Compliance
Mistakes on IRS Form 990-N can lead to extra taxes. Organizations risk losing their charitable status if they miss deadlines or break rules like those set for section 501(c)(3) groups or limited partnerships.
Consequences of Filing Incomplete Forms
The IRS does not count an incomplete Form 990 or Form 990-EZ as fulfilling the yearly filing rule. Groups that do not submit a full return will face non-compliance and lose tax benefits, such as their charitable status under section 501(c)(3).
Private foundations and limited liability companies must upload all needed details about unrelated business income tax (ubit), use tax, equity, and finance. If forms are missing key data—like social security information or arbitration clauses—the IRS may reject them right away.
Organizations might have to pay penalties if they leave out required facts like unrelated business taxable income or opt-in choices for binding arbitration. Courts can remove the group’s exempt status after three years of missed filings in a row, which affects limited partnerships too.
This means loss of special treatment on social security and medicare taxes; it could also hurt fundraising efforts from entrepreneurial partners or limited partners due to poor compliance history uploaded on the web.
Late Filing Penalties
Late filing of Form 990 or 990-EZ often leads to penalties. Tax-exempt organizations, including s-corporations and limited liability companies under section 501(c)(3), must meet these deadlines each year.
Missing the deadline may cause automatic fines based on the size of gross receipts—sometimes $20 per day, up to a maximum of $10,000 for small groups. Larger organizations can see even bigger fines if they delay.
Failing to file for three straight years means losing tax-exempt status. This can affect your ability to receive grants or keep donors who care about philanthropy happy. Private foundations and entities involved with UBTI rules also risk added scrutiny from audits or intermediate sanctions if they file late or submit incomplete forms.
Staying in compliance keeps charities focused on their core missions—now let’s look at how eased requirements help more groups stay eligible for simple e-filing options.
Positive Impact of Eased Filing Requirements
Small nonprofits now find it easier to stay compliant with IRS rules. The new threshold for Form 990-N lets more section 501(c)(3) groups skip complex paperwork. Many small organizations, like local community clubs or arts collectives, no longer need to worry about high costs or long forms.
They can focus on activities instead of tax filings.
The change also reduces the risk of accidental mistakes and late filing penalties. Limited liability company-based charities benefit as well since their reporting is simpler under these updates.
With less tax withheld due to errors and quicker issuance of confirmations from the IRS, staff and volunteers feel relief. These positive steps help groups use their resources where they matter most—in serving others rather than dealing with forms or arbitrations over compliance.
Conclusion
The IRS has made it easier for more section 501(c)(3) groups to file Form 990-N. The higher $50,000 threshold means you spend less time and money on paperwork. Filing is simple, fast, and keeps your incorporation in good shape—no need to worry about compliance or late fees if you meet the rules.
Is your group ready to use these new tools? To stay safe from penalties and personal jurisdiction issues, check the latest IRS guidance or talk with a tax professional for help; smart steps today protect your charity tomorrow.
FAQs
1. Who can file Form 990-N now, after the IRS change?
More groups with section 501(c)(3) status can file Form 990-N. This helps small charities and new organizations keep up with tax rules.
2. Does filing Form 990-N affect warranties of merchantability for nonprofits?
No, filing this form does not make any promises or warranties of merchantability about your group’s work or products.
3. What if there is a dispute over Form 990-N filings; do we arbitrate?
If problems come up, some groups may need to arbitrate. An arbitrator will listen to both sides and help decide what happens next.
4. Can the IRS claim personal jurisdiction over my organization when I file?
Filing Form 990-N means you accept that U.S. laws apply to your group’s actions in this country; it ties into incorporation and how legal matters are handled here.
Ellis Carter is a nonprofit lawyer licensed to practice in Washington and Arizona. Ellis advises tax-exempt clients on federal tax matters nationwide.