Purpose of Form 990-T

Form 990-T, Exempt Organization Business Income Tax Return and Proxy Tax Under Section 6033(e), is one of the variants of the 990 Form Series that the tax-exempt organizations can file to report details regarding their unrelated business income
to the IRS.

Not just that, Form 990-T is also used for the purposes mentioned below,

  • Used by a Regulated Investment Company (RIC) or a Real Estate Investment Trust (REIT) for claiming a refund on an income tax paid on an undistributed long-term capital gain
  • For reporting proxy tax liability
  • For requesting credits
    • for certain federal excise taxes paid (or)
    • for small employer health insurance premiums paid
  • For reporting unrelated business income tax on reinsurance entities.

Who Must File Form 990-T?

Generally, Form 990-T must be filed by the organizations that file Form 990, 990-EZ, or 990-PF and have an unrelated business income of $1000 or more during the corresponding tax year.

Examples of Unrelated Businesses

Following are the criteria for any activity to be considered an unrelated business.

  • Trade or Business
    Any activity performed by the organization that generates income by selling goods or performing services.
  • Regularly Conducted
    The activity should be conducted regularly to be considered an unrelated business or trade.
  • Not substantially related
    The activity that doesn’t contribute to the organization’s exempt purpose substantially will be considered an unrelated business or trade.

Deadline to file Form 990-T

The due date for filing Form 990-T may vary based on the type of organization,

  • Employees' trusts, defined in section 401(a), IRAs (including SEPs and SIMPLEs), Roth IRAs, Coverdell ESAs, or 408(a) (Archer MSAs) - the due date to file Form 990-T is the 15th day of the 4th month after the end of the organization’s accounting period.
  • For other organizations - Form 990-T is due by the 15th day of the 5th month after the end of the organization’s accounting period.

This means the organizations following the calendar tax year will have their Form 990-T deadline either on April 15 (or) May 15,
based on their type.

Following a fiscal tax year? Find out your organization's 990-T deadline.

Late filing Penalties for Form 990-T

In case the organizations fail to file Form 990-T on or before the deadline, the IRS will impose a penalty of 5% of the unpaid tax for each month or part
of a month that is late.

The minimum penalty amount for a Form 990-T filed after 60 days from the deadline is the tax due or $435, whichever is smaller. The maximum penalty is 25% of the
unpaid tax.

Learn More about penalties

Extension for Filing Form 990-T

If the organizations need more time to file their 990-T return, they can file Form 8868 and get an extension of up to 6 months from
the IRS.

Also, they doesn’t have to provide an explanation to the IRS about why they need more time since this extension is automatic.

Tax990 Simplifies Form 990-T E-filing for Nonprofits!

Tax990 is a leading IRS-authorized e-file provider that offers a seamless e-filing solution for the exempt organizations to e-file Form 990-T easily, securely
and accurately.

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