Form 990 for New Nonprofits: What First-Year Organizations Need to Know

Starting a nonprofit organization is exciting. It’s a time for big ideas, thoughtful planning, and laying the foundation for a lasting impact. 

It also means navigating a whole new world of compliance requirements. One of those is filing your IRS Form 990. 

Taxes can feel intimidating for new nonprofits, but staying in good standing is much easier than it sounds. In this guide, we’ll cover everything first-year nonprofits need to know about Form 990, including what to file, when to file, and how to stay compliant right from the start. 

Do new nonprofits have to file a 990 in their first year? 

This is one of the most common tax-related questions new nonprofits have. So let’s set the record straight right away.

In most cases, tax-exempt organizations are required to file Form 990 in their first year.

While it’s understandable that first-year nonprofits might assume there’s a grace period, that’s not actually true. If your organization is officially recognized as tax-exempt, you’re required to file annually, starting in your very first year. 

What if we had little (or no) activity in our first year?

It takes time to get a new nonprofit up and running. So if you didn’t have much activity or raise much money in your first year, you may wonder if you still need to file. 

The answer is yes. Tax-exempt organizations are required to file a Form 990 in their first year. This is true even when activity is minimal or revenue is low. 

The good news is that if your organization had a slow first year, you’ll likely be eligible to file Form 990-N, which is the simplest version in the Form 990 series. We’ll take a closer look at the different versions of Form 990 next. 

Which version of Form 990 do we need to file in our first year?

Tax-exempt organizations are required to file Form 990 each year. But there are several different versions of this form, and you may have questions about which one your new nonprofit must file. 

The answer depends on your organization’s gross receipts for the year. Here’s a quick breakdown of some of the most common versions of Form 990 and the thresholds for each. 

Form 990-N (aka the e-Postcard)

The e-Postcard is used by small nonprofits with $50,000 or less in gross receipts. It’s the simplest version, with fewer than 10 basic questions, and it’s filed completely online. 

Form 990-EZ (aka the short form)

This version is for medium-sized nonprofits with gross receipts ranging from $50,000 to $200,000 and total assets of less than $500,000. It requires more in-depth information than the e-Postcard, but it’s still significantly shorter than the full Form 990. 

Form 990 (aka the long form)

This version is used by large or more complex organizations with gross receipts over $200,000 or total assets over $500,000. It’s the most detailed version, with multiple sections and schedules to complete. 

The majority of first-year nonprofits are eligible to file Form 990-N. But don’t assume that’s the case. Keep track of your gross receipts throughout the year so you can confidently determine which version to file when tax time rolls around. 

If you’re not sure how to figure out your organization’s gross receipts, you’re certainly not alone. Start by adding up all income your organization receives during the year, including donations, grants, program revenue, and any other funds. 

When is your first 990 due?

Your 990 filing deadline is the 15th day of the fifth month after your fiscal year ends. For example, if your fiscal year ends on June 30, your filing deadline is November 15. This deadline applies even for first-time filers.

It’s worth noting that you don’t have to wait until your deadline to file. You can file your organization’s first 990 as soon as the day after your fiscal year ends. 

What information do you need to file?

The information you need to include in your first 990 filing depends on the version you’re eligible to use.

As mentioned earlier, most new nonprofits are eligible to file Form 990-N. This version is short and sweet and only includes basic details such as:

• EIN
• Organization name and address
• Tax year 
• Principal officer information 
• Confirmation that your gross receipts fall below the $50,000 threshold
• Website (if applicable) 

If your organization is required to file Form 990-EZ or the full Form 990, you’ll be required to provide more detailed financial and operational information. 

What happens if you don’t file your first year?

There’s a lot that goes into getting a new nonprofit off the ground. So it’s easy to see how tax filing could fall off your radar. But it’s important to get it done because missing your first filing can cause major headaches down the road.

There’s no immediate penalty for failing to file the appropriate version of Form 990. However, if your organization fails to file for three consecutive years, your tax-exempt status will automatically be revoked. This can make it tougher to raise money, qualify for grants, and run your organization. 

However, missed filings can cause problems even before the three-year mark. Form 990 filings are public record, and donors, grantmakers, and other stakeholders often review them when evaluating nonprofits. Filing gaps can make your organization appear inactive or out of compliance, which may discourage donations.

As a new nonprofit, you have a lot on your plate. But it’s easier to stay on track with your 990 filings right from the start than it is to fix bigger issues down the road. 

Start your new nonprofit off on the right foot

Filing your first Form 990 is a key step in building a compliant, trustworthy nonprofit. Fortunately, the process is usually easier than most people expect.

Set a reminder so you don’t forget to file. Filing in your first year lays the foundation for simpler, stress-free filings in the future.

Ready to file your first 990-N the easy way? Find out how 501c3 Center, an authorized IRS e-File provider, can help you file in minutes.