How Nonprofit Sports Groups and Clubs File Taxes: A Step-by-Step Guide

Sports provide a number of benefits to people of all ages, including improved health, confidence, resilience, and teamwork. Nonprofit sports clubs help make these benefits accessible to more people. 

If you’re not sure how nonprofit sports clubs file their taxes, you’re in the right place. In this guide, we’ll explain whether clubs are required to file, which forms they need to use, and what steps to take to complete the process as quickly and easily as possible. 

Do nonprofit sports clubs have to file taxes? 

Some may assume that because a nonprofit sports club doesn’t make a profit, they don’t have to file taxes. But that’s not actually the case.

It’s true that tax-exempt sports clubs don’t have to pay federal income taxes. But typically, they’re still required to file an annual tax return with the IRS.

Annual filings allow the IRS to confirm the club is still operating for its stated nonprofit purpose and meeting its compliance requirements. Filing consistently is a critical part of staying in good standing with the IRS and protecting your club’s tax exempt status. 

What are the requirements for filing taxes for a nonprofit sports club? 

For most nonprofit sports clubs, meeting tax filing obligations involves submitting an annual informational return. As the name suggests, these returns collect basic information from the previous tax year, including:

• Financial activity
• Leadership
• Operations

Tax filings are primarily informational for tax-exempt sports clubs. They simply collect the information needed to demonstrate your club is operating for its intended purpose and managing its funds responsibly. 

What forms are required for nonprofit sports clubs? 

Most nonprofit sports clubs are required to file a version of IRS Form 990 each year. The specific version your club must file depends on its gross receipts and total assets from the previous tax year.

Here’s a closer look at some of the versions of Form 990 most commonly used by nonprofit sports clubs, listed from least to most complex. 

Form 990-N: for small nonprofit sports clubs

Nonprofit sports clubs are typically eligible to file Form 990-N (also known as the e-Postcard) if they normally have $50,000 or less in annual gross receipts. It’s the simplest version of Form 990 and must be filed electronically.

Form 990-EZ: for medium-sized nonprofit sports clubs

Nonprofit sports clubs are typically eligible to file Form 990-EZ if they have more than $50,000 but less than $200,000 in annual gross receipts and total assets under $500,000. This often includes medium-sized clubs that collect membership dues, charge registration fees, or host tournaments. 

Form 990-EZ requires more detailed information than Form 990-N, but it’s still less complex than the full Form 990. It’s almost always filed online. 

Full Form 990: for large or complex nonprofit sports clubs

If a nonprofit sports club exceeds the gross receipts or total assets threshold for Form 990-EZ or has complex operations, it may be required to file the full IRS Form 990. 

This is the most detailed version of the form. Though it’s less common for nonprofit sports clubs, it does apply to organizations with bigger budgets or more extensive operations. 

Must read: 990-N vs 990-EZ vs 990: What Nonprofits Needs to Know

What are the steps for filing my nonprofit sports team’s taxes? 

Anything related to taxes can seem overwhelming. But fortunately, filing your nonprofit sports club’s taxes is usually a straightforward process – especially when you know what to expect. 

Here are the steps you’ll need to take.

1. Review your club’s financial activity

If your club keeps its financial records organized throughout the year, this step should be fairly simple. 

Be sure to pay attention to gross receipts, not just net income. For nonprofit sports clubs, gross receipts may include line items like:

• Membership dues
• Registration fees
• Tournament revenue
• Sponsorships
• Fundraising proceeds

All of this income counts towards your gross receipts for the year.

2. Determine which version of Form 990 your club must file

Once you’ve figured out your club’s gross receipts and total assets from the previous tax year, you can determine which version of Form 990 you must file.

While you may have filed one version of Form 990 last year, don’t assume the same form applies this year. A strong season, large tournament, or increased participation can change which form your club is required to file.

3. Assign responsibility for filing

In many nonprofit sports clubs, the responsibility of completing and filing taxes falls to the treasurer or another board member. But don’t assume they know they’re responsible – especially if they’re new to the role. 

Leadership roles can change frequently. Assign responsibility early on to help prevent confusion later on.

4. Identify your filing deadline

Your tax filing deadline is based on your club’s fiscal year. Generally, Form 990 (and all its variations) is due by the 15th day of the fifth month after the end of your fiscal year. So, if your fiscal year ends on December 31, your filing deadline is May 15.

Figure out your deadline early on, and make a plan to meet that date. 

5.  Gather the required information

Gather the information you’ll need to complete your club’s tax filing. While the exact information varies based on the version of Form 990 you’re using, it typically includes:

• Legal name and EIN
• Fiscal year start and end dates
• Gross receipts and basic financial totals
• Names and titles of officers or board members

When you get this information organized first, the filing process will be faster and easier.

6. Complete and file the tax return

Once you’ve identified the right form, confirmed your deadline, and gathered the right information, it’s time to file your club’s taxes.

Form 990-N must be filed electronically. Other versions of Form 990 are also typically filed online, except in very specific circumstances.

If your nonprofit sports club is eligible to file Form 990-N, an IRS-authorized e-file provider like 501c3 Center can help. Just answer a few simple questions about your organization, and your 990-N is filed in minutes.

What happens if a nonprofit sports club misses its tax filing deadline?

Missing a single filing deadline doesn’t come with any major penalties. But if a nonprofit sports club fails to file taxes for three years in a row, the IRS will automatically revoke its tax exempt status. 

Losing your club’s tax exempt status can negatively impact its ability to collect dues, secure sponsorships, apply for grants, or maintain relationships with leagues, facilities, and community partners.

Even a single missed year can cause problems down the road, especially if your club has leadership changes. New officers may inherit compliance issues, which make future filings a bigger headache. 

Nonprofit sports clubs are busy. But it’s important to stay on top of your annual tax filings. Doing so helps protect your tax-exempt status, supports long-term continuity, and prevents unnecessary setbacks.

501c3 Center makes tax filing easier for nonprofit sports clubs

Nonprofit sports clubs help more people enjoy the many benefits of athletics. Filing your club’s taxes each year is an important way to ensure your club can continue to have a strong impact on your community.

Nonprofit tax filings might seem complicated. But with the support of 501c3 Center, it doesn’t have to be. 

If your nonprofit sports club is eligible to use Form 990-N, 501c3 Center can help you file in just a few minutes. Answer a few questions, and we’ll prepare your 990-N right away.

Plus, if you file your 990-N with us, you can enjoy 13 months of MoneyMinder, a leading accounting solution for nonprofit sports clubs, for just $99 (a $299 value). With MoneyMinder, you’ll have all the tools you need to stay on top of your club’s finances all year long. Find out more about this exclusive discount.