ExpressTaxExempt Now Supports E-filing of Form 990-T
Although tax-exempt organizations do not have to pay income taxes, they are still required to pay tax on Unrelated Business Taxable Income (UBTI). With that comes filing annual information returns to the IRS such as Form 990-T. If your organization needs to file Form 990-T, ExpressTaxExempt is here to help!
ExpressTaxExempt is a trusted e-filing service that nonprofit and tax-exempt organizations use to e-file their annual 990 series returns. ExpressTaxExempt supports e-filing of Form 990, 990-EZ, 990-N, 990-PF, CA Form 199, 1120-POL, and Extension Form 8868. ExpressTaxExempt will now support e-filing for Form 990-T as well! ExpressTaxExempt is here to ensure your organization remains IRS compliant and meets your Form 990-T deadline with ease.
Here is an overview of everything your organization should know about Form 990-T:
What is Form 990-T?
Form 990-T, Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e)), is used to report unrelated business income and tax liabilities.
The IRS defines Unrelated Business Taxable Income or (UBTI), as “income generated from a trade or business that is regularly maintained; however, the income does not substantially relate to the charitable, educational, or other purpose that is the basis of the organization’s exemption.”
As outlined by the IRS, Form 990-T can also be used for several other purposes including:
- To claim a refund on an income tax paid by a regulated investment company (RIC) or a real estate investment trust (REIT) on an undistributed long-term capital gain
- To report proxy tax liability
- To request credits for certain federal excise taxes paid or for small employer health insurance premiums paid
- To report unrelated business income on reinsurance entities
Who Needs to File Form 990-T
Exempt organizations that file Form 990, 990-EZ, or 990-PF and have $1,000 or more of gross income from unrelated businesses for the tax year must file Form 990-T.
When an organization files their annual information return, Form 990, 990-EZ, or 990-PF, they must file a separate IRS Form 990-T.
When is the Deadline to File Form 990-T?
For most exempt organizations, Form 990-T is due annually by the 15th day of the 5th month after the end of their tax year.
There is a separate deadline for the following organizations:
- Employees’ trusts, defined in section 401(a), IRAs (including SEPs and SIMPLEs), Roth IRAs, Coverdell ESAs, or 408(a) (Archer MSAs) must file Form 990-T by the 15th day of the 4th month after the end of their tax year.
It is important to note that if a due date falls on a Saturday, Sunday, or legal holiday, the due date will be moved to the next business day.
E-Filing Mandate for Form 990-T
Under the Taxpayer First Act, an important change was recently made in regards to filing Form 990-T with the IRS. Effective in 2021, all organizations with a due date on or after April 15, 2021, must file Form 990-T for 2020 electronically. Thus, paper filing Form 990-T is no longer an option. However, limited exceptions may apply.
Following the e-filing mandate for Form 990-T, organizations will need to use an online e-filing service to file their return. ExpressTaxExempt is an IRS authorized e-filing service that will help organizations e-file Form 990-T to the IRS securely.
To make filing easier than ever, when e-filing with ExpressTaxExempt, you can add additional users to assist in form preparation, invite others to review and approve your return before filing, and catch and correct errors easily with our internal audit. Also, Schedules are included for no additional cost and you can re-transmit rejected forms free of charge. And as always, our dedicated customer support team will be there to assist you during your filing process whenever necessary.
Form 990-T Schedule A
In September, the IRS released a considerable redesign of Form 990-T for the 2020 tax year, including the e-filing mandate, mentioned previously. Among these changes, the most prominent is the addition of Schedule A.
Click here, to learn more about the Form 990-T redesign for 2020.
In the updated form, reporting will be divided into two sections. These sections include the base Form 990-T and the new Schedule A. The new Schedule A (Form 990-T) replaces the previous Schedule M and is meant to be prepared for each separate unrelated business activity. Meaning, each unrelated trade or business an organization participates in must have a separate “Schedule A” attached to the return, with a list of how many Schedules A’s are attached.
When you e-file 990-T with ExpressTaxExempt, you can attach Schedule A for free.
ExpressTaxExempt
ExpressTaxExempt is a trusted e-filing service that will help you e-file Form 990-T with ease. When filing, clients will receive access to internal audit checks, instant notifications on their return status, and dedicated live customer support. Make ExpressTaxExempt, your go-to spot for convenient and secure e-filing.
