Accounting Periods

Accounting Methods

An “accounting method,” for federal income tax purposes, is a practice a taxpayer follows to determine the tax year in which to report revenue and expenses for federal income tax purposes. An accounting method includes not only the overall plan of accounting for gross income or deductions (for example, an accrual method or the cash receipts and disbursement method), but also the treatment of any item that involves the proper time for the inclusion of an item in income or the taking of an item as a deduction, or both. However, a practice that does not affect the timing for reporting an item of income or deduction for purposes of determining taxable income is not an accounting method. A taxpayer, including a tax-exempt entity, generally adopts any permissible accounting method in the first year in which it uses the method in determining its taxable income. See Rev. Proc. 2015-13, 2015-5 I.R.B. 419 as modified by Rev. Proc. 2021-34, 2021-35 I.R.B. 337.

An exempt organization may adopt an accounting method not only for purposes of calculating taxable income, but also for purposes of determining whether taxable income will be subject to federal income tax. For example, a tax-exempt entity may adopt an accounting method for an item of income from an unrelated trade or business activity even if the gross income from such activity is less than $1,000 and is therefore not taxed for federal income tax purposes pursuant to Regulations section 1.6012-2(e).

An accounting method for an item of income or deduction may generally be adopted separately for each of the taxpayer's trades or businesses. However, in order to be permissible, an accounting method must clearly reflect the taxpayer's income. Unless instructed otherwise, the organization should generally use the same accounting method on the return (including Form 990-EZ and all schedules) to report revenue and expenses that it regularly uses to keep its books and records.

An organization should keep a reconciliation of any differences between its books of account and the Form 990-EZ that is filed.

Item A. Accounting Period

File the 2023 return for calendar year 2023 and fiscal years that began in 2023 and ended in 2024. For a fiscal year return, fill in the tax year space at the top of page 1 of the return. See General Instructions C. Accounting Periods and Methods, earlier, for additional information about accounting periods.

Item B. Checkboxes

An organization must support any claim to have liquidated, terminated, dissolved, or merged by attaching a certified copy of its articles of dissolution or merger approved by the appropriate state authority. If a certified copy of its articles of dissolution or merger isn’t available, the organization may submit a copy of a resolution(s) of its governing body approving plans of liquidation, termination, dissolution, or merger.

Item C. Name and Address

Enter the organization's legal name in the “Name of organization” box. If the organization operates under a name different from its legal name, identify its alternate name, after the legal name, by writing “a.k.a.” (also known as) and the alternate name of the organization. If multiple a.k.a. names won’t fit in the box, list them in Schedule O (Form 990). However, if the organization has changed its legal name, follow the instructions in Item B for reporting the name change.

Include the suite, room, or other unit number after the street address. If the post office doesn’t deliver mail to the street address and the organization has a P.O. box, enter the box number instead of the street address.

If the organization receives its mail in care of a third party (such as an accountant or an attorney), enter “C/O” on the street address line, followed by the third party's name and street address or P.O. box.

For foreign addresses, enter information in the following order: city or town, state or province, the name of the country, and the postal code. Don’t abbreviate the country name.

If a change of address occurs after the return is filed, use Form 8822-B, Change of Address or Responsible Party — Business, to notify the IRS of the new address.

Item D. Employer Identification Number (EIN)

Use the EIN provided to the organization for filing its Form 990-EZ and federal tax returns. The organization must have only one EIN. If the organization has more than one EIN and hasn’t been advised which to use, send notice to:

State what EINs the organization has, the name and address to which each number was assigned, and the address of the organization's principal office. The IRS will advise the organization which number to use.

A subordinate organization in a group exemption that is filing an individual Form 990-EZ return must use its own EIN, not that of the central organization or of the group return.

A section 501(c)(9) voluntary employees' beneficiary association must use its own EIN and not the EIN of its sponsor.

Item E. Telephone Number

Enter a telephone number of the organization that members of the public and government personnel can use during normal business hours to obtain information about the organization's finances and activities. If the organization doesn’t have a telephone number, enter the telephone number of an organization official who can provide such information.

Item F. Group Exemption Number

Enter the four-digit group exemption number if the organization is included in a group exemption. The group exemption number (GEN) is a number assigned by the IRS to the central/parent organization of a group that has a group exemption letter. Contact the central/parent organization to ascertain the GEN assigned.

If the organization is covered by a group exemption letter as a subordinate organization, the organization should file Form 990-EZ only if the organization isn’t included in a group return filed by the central/parent organization for the tax year.

The central/parent organization of a group ruling can’t file a group return with Form 990-EZ but must use Form 990.

Item G. Accounting Method

Indicate the method of accounting used in preparing this return. See General Instructions C, earlier.

Item H. Schedule B (Form 990)

Whether or not the organization enters any amount on line 1 of Form 990-EZ, the organization must either check the box in Item H or attach Schedule B (Form 990). Failure to either check the box in Item H or file Schedule B (Form 990) will result in a determination that the return is incomplete. Complete and file Schedule B (Form 990) if the organization met any of the following conditions during the tax year.

Do not attach substitutes for Schedule B (Form 990). Parts I, II, and III of Schedule B (Form 990) may be photocopied as needed to provide adequate space for listing all contributors.

For purposes of Schedule B (Form 990), contributors include individuals, fiduciaries, partnerships, corporations, associations, trusts, and exempt organizations. For organizations described in section 170(b)(1)(A)(iv) or (vi) or section 509(a)(2), contributors also include governmental units.

Item I. Website

Enter the organization’s current address for its primary website, as of the date of filing this return. If the organization doesn’t maintain a website, enter “N/A” (not applicable).

Item J. Tax-Exempt Status

Check the applicable box to show the organization's tax-exempt status. If the organization is exempt under section 501(c) (other than 501(c)(3)), check the 501(c) box and insert the appropriate subsection number within the parentheses (for example, “4” for a 501(c)(4) organization). See the chart in Appendix A: Exempt Organizations Reference Chart, later. The term “section 501(c)(3)” includes organizations exempt under sections 501(e), (f), (k), and (n).

Item K. Form of Organization

Check the box describing the organization's legal entity form or status under state law in its state of legal domicile. Legal entity forms include corporations, trusts, unincorporated associations, and other types of entities (for example, partnerships and limited liability companies (LLCs)).

Section 527 political organizations have different gross receipts thresholds for Form 990-EZ filing, and aren’t required to submit Form 990-N. See Section 527 political organizations, earlier, for more information.

Section 501(c)(7) and 501(c)(15) organizations use different definitions of gross receipts to determine whether they qualify for tax exemption for the year. Appendix C defines gross receipts for the purpose of determining the exempt status of organizations described in sections 501(c)(7) and 501(c)(15). Do not use the definition of gross receipts in Appendix C to determine whether the organization's gross receipts are normally $50,000 or less.

Item L. Determining Gross Receipts

Add lines 5b, 6c, and 7b to line 9 to determine gross receipts. See Appendix B and Appendix C, later, for a discussion of gross receipts.

Only those organizations with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of the tax year can use Form 990-EZ. If the organization doesn’t meet these requirements, it must file Form 990, unless excepted under General Instructions B, earlier.

Do not use the definition of gross receipts for section 501(c)(7) or 501(c)(15) exemption purposes (discussed in Appendix C) to determine the amount to enter here.

Line 1. Contributions, Gifts, Grants, and Similar Amounts Received

The information on Form 1099-K, Payment Card and Third Party Network Transactions, may be useful in helping you to prepare your return but you aren’t required to report the information on any specific line of your return. An organization that receives a Form 1099-K reporting a gross amount of payment card or third party network payments received in the tax year should consider these amounts when reporting contributions and revenue on lines 1 through 8, according to the instructions for preparing the return. You should retain all Forms 1099-K with your other records.

Section 501(c)(3) organizations must figure the amount of contributions according to the above instructions in preparing the support schedule in Part II or III of Schedule A (Form 990).

Line 2. Program Service Revenue Including Government Fees and Contracts

Enter the total program service revenue (exempt function income). Program services are primarily those that form the basis of an organization's exemption from tax.

Line 3. Membership Dues and Assessments

Enter members' and affiliates' dues and assessments that aren’t contributions.

Line 4. Investment Income

Lines 5a Through 5c. Gains (or Losses) From Sale of Assets Other Than Inventory

Line 6a. Gaming

Report gross income from gaming on line 6a if the organization conducted directly, or through a promoter, any amount of gaming during the year. Report the gross income from all gaming activities (other than gaming that is incidental to a fundraising event such as a dinner/dance), whether or not regularly carried on, on line 6a.

Gaming includes (but isn’t limited to) bingo, pull tabs, instant bingo (including satellite and progressive bingo), Texas Hold-Em Poker and other card games, raffles, scratch-offs, charitable gaming tickets, break-opens, hard cards, banded tickets, jar tickets, pickle cards, Lucky Seven cards, Nevada Club tickets, casino nights/Las Vegas nights (other than events not regularly carried on in which participants can play casino-style games but the only prizes or auction items provided to participants are noncash items that were donated to the organization, which are fundraising events), and coin-operated gambling devices. Coin-operated gambling devices include slot machines, electronic video slot or line games, video poker, video blackjack, video keno, video bingo, video pull tab games, etc.

Many games of chance are taxable. Income from bingo games is generally not subject to the tax on unrelated business income if the games meet the legal definition of bingo. For a bingo game to meet the legal definition of bingo, wagers must be placed, winners must be determined, and prizes or other property must be distributed in the presence of all persons placing wagers in that game.

A wagering game that doesn’t meet the legal definition of bingo doesn’t qualify for the exclusion from unrelated business income, regardless of its name. For example, “instant bingo,” in which a player buys a pre-packaged bingo card with pull tabs that the player removes to determine if the player is a winner, doesn’t qualify. See Pub. 598, Tax on Unrelated Business Income of Exempt Organizations; Pub. 3079, Tax-Exempt Organizations and Gaming; and Form 990-T.

Line 6b. Fundraising Events

Enter the gross income from all fundraising events and activities, such as dinners, dances, carnivals, concerts, sports events, auctions, and door-to-door sales of merchandise.

Fundraising events and activities only incidentally accomplish an exempt purpose. Their sole or primary purpose is to raise funds to finance the organization's exempt activities. They don’t include events or activities that substantially further the organization's exempt purpose even if they also raise funds. They don’t include activities regularly carried on. Fundraising events don’t include gaming, gross income from which is reported on line 6a.

Lines 6c and 6d. Direct Expenses and Net Income or (Loss) From Gaming and Fundraising Events

Report on line 6c direct expenses related to gaming activities and direct expenses attributable to the organization's provision of goods or services from which it derived gross income at a fundraising event. Do not report fundraising expenses attributable to contributions reported on line 1. These expenses are reportable on lines 12 through 16. If an expense is included on line 6c, don’t report it again on line 7b.

To figure net income or (loss) on line 6d, add lines 6a and 6b, then subtract line 6c.

Line 7a. Sales of Inventory

Include on line 7a the gross sales (less returns and allowances) of inventory items, whether the sales activity is an exempt function or an unrelated trade or business. Inventory items are goods the organization makes to sell to others, or that it buys for resale. Include all inventory sales except sales of goods at fundraising events, which are reportable on line 6. Do not include on line 7 sales of investments on which the organization expected to profit by appreciation and sale; report sales of these investments on line 5.

Line 7b. Cost of Goods Sold

On line 7b, report the cost of goods sold related to sales of such inventory. The usual items included in cost of goods sold are direct and indirect labor, materials and supplies consumed, freight-in, and a proportion of overhead expenses. For purposes of Part I, the organization may include as cost of donated goods their FMV at the time of acquisition. Marketing and distribution expenses aren’t includible in cost of goods sold but are reported on lines 12 through 16.

Line 8. Other Revenue

Enter the total income from all sources not covered by lines 1 through 7. Examples of line 8 income are interest on notes receivable not held as investments or as program-related investments (defined in the line 2 instructions); interest on loans to officers, directors, trustees, key employees, and other employees; and royalties that aren’t investment income or program service revenue. Describe this income on Schedule O (Form 990).

Line 10. Grants and Similar Amounts Paid

Line 11. Benefits Paid to or for Members

For an organization that gives benefits to members or dependents (such as organizations exempt under section 501(c)(8), (9), or (17)), enter the amounts paid for or paid to obtain insurance that provides:

Line 12. Salaries, Other Compensation, and Employee Benefits

Enter the total salaries and wages paid to all officers and employees and payments made to directors and trustees, including compensation reported on Forms W-2 and 1099. Include all other forms of income and benefits received from the organization during the year, such as the employer’s share of deferrals (for unfunded plans) and contributions the organization paid to qualified and nonqualified pension and deferred compensation plans, and the employer's share of contributions to employee benefit programs (such as insurance, health, and welfare programs) that aren’t an incidental part of a pension plan.

Complete Form 5500 if the organization is required to file it.

Also, include in the total on line 12 the amount of federal, state, and local payroll taxes for the year that are imposed on the organization as an employer. This includes the employer's share of social security and Medicare taxes, federal unemployment tax (FUTA), state unemployment compensation tax, and other state and local payroll taxes. Taxes withheld from employees' salaries and paid over to the various governmental units (such as federal and state income taxes and the employees' share of social security and Medicare taxes) are part of the employees' salaries included on line 12. Report expenses paid or incurred for employee events such as a picnic or holiday party on this line. For more information, see Pub. 15 (Circular E), Employer's Tax Guide.

Compensation for line 12 is reported based on the accounting method and tax year used by the organization, whereas compensation for Part IV, List of Officers, Directors, Trustees, and Key Employees, and Part VI, lines 50 and 51 (compensation of highest compensated employees and independent contractors), is reported for the calendar year ending with or within the organization’s fiscal year.

Line 13. Professional Fees and Other Payments to Independent Contractors

Enter the total amount of legal, accounting, auditing, other professional fees (such as fees for fundraising or investment services), and related expenses charged by outside firms and individuals who aren’t employees of the organization.

Do not include any penalties, fines, or judgments imposed on the organization as a result of legal proceedings; report and identify those expenses on line 16. Report on line 12 fees paid to directors and trustees. Also, report on line 12 compensation to employees that provide fundraising, legal, accounting, or other professional services as part of their employment. Report broker fees/commissions as sales expenses on line 5b.

If the organization is able to distinguish between fees paid for independent contractor services and expense payments or reimbursements to the contractor(s), report the fees paid for services on line 13 and the expense payments or reimbursements on lines 14 through 16, as applicable. If the organization is unable to distinguish between service fees and expense payments or reimbursements to independent contractors, report all such amounts on line 13.

If your organization pays $600 or more to persons not treated as employees, you may be required to file Form 1099-NEC, Nonemployee Compensation, or Form 1099-MISC, Miscellaneous Income. For more information, see the Instructions for Forms 1099-MISC and 1099-NEC.

Line 14. Occupancy, Rent, Utilities, and Maintenance

Enter the total amount paid or incurred for the use of office space or other facilities, including rent; mortgage interest; heat, light, power, and other utilities; outside janitorial services; real estate taxes and property insurance attributable to rental property; and similar expenses.

These expenses relate to real property actually occupied by the organization, whether as tenant or owner, or used in the conduct of exempt functions (such as low-income rental housing). Report on line 16 expenses relating to real property used for investment purposes. If the organization occupies part of the property and leases a part to others, then expenses must be reasonably allocated between occupancy-related and investment-related expenses, and reported accordingly on lines 14 and 16.

If the organization records depreciation on property it occupies, enter the total for the year. For an explanation of acceptable methods for figuring depreciation, see Pub. 946, How To Depreciate Property.

Report on line 14 or 16 rental expenses for rental income reported on lines 2 and 4. Do not decrease rental expenses reported on line 14 or 16 by any rental income received from renting or subletting rented space. See the instructions for lines 2 and 4 to determine if the income is reportable as exempt function income or investment income.

Line 15. Printing, Publications, Postage, and Shipping

Enter the printing and related costs of producing the filing organization's own newsletters, leaflets, films, and other informational materials, as well as the cost of outside mailing services on line 15. Also, include the cost of any purchased publications as well as postage and shipping costs not reportable on line 5b, 6c, or 7b. Do not include any expenses, such as salaries, for which a separate line is provided.

Line 16. Other Expenses

Report expenses here that aren’t reportable on lines 10 through 15. Include here such expenses as penalties, fines, and judgments; unrelated business income taxes; insurance, interest, depreciation, and real estate taxes not reported as occupancy expenses; travel and transportation costs; and expenses for conferences, conventions, and meetings. Provide a description of these expenses on Schedule O (Form 990). Do not report on this line payments made by organizations exempt under section 501(c)(8), (9), or (17) to obtain insurance benefits for members. Report those expenses on line 11.

Some states that accept Form 990-EZ in satisfaction of their filing requirements may require that certain types of miscellaneous expenses be itemized. See Appendix G, later.

Line 18. Excess or (Deficit) for the Year

Enter the difference between lines 9 and 17. If line 17 is more than line 9, enter the difference in parentheses or as a negative number with a minus sign.

Line 19. Net Assets or Fund Balances at Beginning of Year

Enter on line 19 the end-of-year amount from the balance sheet on the prior-year return.

Line 20. Other Changes in Net Assets or Fund Balances

Explain in Schedule O (Form 990) any changes in net assets or fund balances between the beginning and end of the organization's tax year that aren’t accounted for by the amount on line 18. Include items here such as:

See General Instructions C regarding the reporting of a section 481(a) adjustment to conform to ASC 958.

Line 22. Cash, Savings, and Investments

Include all interest and non-interest bearing accounts (petty cash funds, checking accounts, savings accounts, money market funds, commercial paper, certificates of deposit, U.S. Treasury bills, and other government obligations). Also, include the book value of securities held as investments, and all other investment holdings including land and buildings held for investment. Report the income from these investments on line 4; report income from program-related investments on line 2.

Line 23. Land and Buildings

Enter the book value (cost or other basis less accumulated depreciation) of all land and buildings owned by the organization and not held for investment.

Line 24. Other Assets

Enter the total of other assets such as accounts receivable, inventories, prepaid expenses, and the organization’s share of assets in any joint ventures, LLCs, and other entities treated as a partnership for federal tax purposes. Also, include a description of the assets in Schedule O (Form 990).

Line 25. Total Assets

Enter amount of total assets. If the end-of-year total assets entered in column (B) are $500,000 or more, Form 990 must be filed instead of Form 990-EZ.

Line 26. Total Liabilities

Liabilities include such items as accounts payable, grants payable, mortgages or other loans payable, and deferred revenue (revenue received but not yet earned). Provide a description of these liabilities on Schedule O (Form 990).

Line 27. Net Assets or Fund Balances

Subtract line 26 (total liabilities) from line 25 (total assets) to determine net assets. Enter this net asset amount on line 27. The amount entered in column (B) must agree with the net asset or fund balance amount on line 21.

States that accept Form 990-EZ as their basic report form may require a separate statement of changes in net assets. See Appendix G.

Common paymaster or payroll/reporting agent.

Treat amounts paid by a common paymaster (as defined in Regulations section 31.3121(s)-1(b)(2)) or a payroll or reporting agent (which is or should be appointed by the organization on Form 2678, Employer/Payer Appointment of Agent, or authorized by the organization on Form 8655, Reporting Agent Authorization, to perform certain employment tax services on behalf of the organization) for services performed for the organization as if the organization had paid such amounts directly, and report these amounts in the appropriate columns in Part IV.

Column (a)

For each person required to be listed, enter the name in the top of each row and the person's title or position with the organization in the bottom of the row. If the person had more than one title or position, list all (for instance, president and director). List persons in the following order: individual trustees or directors, institutional trustees, officers, and key employees.

Up to 11 persons can be reported on the Form 990-EZ, Part IV, table. If more space is needed to enter additional persons, use as many duplicates of the Part IV table as are needed.

Column (b)

For each person listed in column (a), report an estimate of the average hours per week the person devoted to the organization during the year. Entry of a specific number of hours per week is required for a complete answer. Enter “-0-” if applicable. Do not include statements such as “as needed,” “as required,” or “40+.” If the average is less than 1 hour per week, then the organization can enter a decimal rounded to the nearest tenth (for example, 0.2 hours per week).

Columns (c)–(e)

All compensation reporting is based on the calendar year ending with or within the organization's tax year. For example, if a fiscal-year organization's tax year is the 12-month period beginning July 1, 2023, and ending June 30, 2024, the organization must report compensation for the calendar year ending December 31, 2023.

Corporate officers are considered employees for purposes of Form W-2 reporting, unless they perform no services as officers, or perform only minor services and neither receive nor are entitled to receive, directly or indirectly, any compensation. Corporate directors are considered independent contractors, not employees, and director compensation, if any, is generally required to be reported on Form 1099-NEC. See Regulations section 31.3401(c)-1(f).

For employees, such as certain members of the clergy and religious workers who aren’t subject to social security and Medicare taxes as employees, box 5 of Form W-2 can be zero or less than the amount in Form W-2, box 1. In those cases, the amount required to be reported in box 1 of Form W-2 must be reported as reportable compensation in column (c).

Line 33. Change in Activities

Describe in Schedule O (Form 990) any significant activities that the organization conducted prior to the end of the tax year that it hasn’t previously reported to the IRS on Form 990-EZ or 990. Also, describe significant activities that were discontinued. If the organization has never filed a Form 990 or 990-EZ, answer “No.”

An organization must report new, significant program services or significant changes in how it conducts program services in Part III of Form 990-EZ and in Schedule O (Form 990), rather than in a letter to the IRS Exempt Organization Determinations Office (“EO Determinations”). EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report such new services or significant changes.

Line 34. Changes in Organizing or Governing Documents

The organization must report significant changes to its organizing or enabling document by which it was created (articles of incorporation, association, or organization; trust instrument; constitution; or similar document), and to its rules governing its affairs (bylaws, regulations, operating agreement, or similar document). Report changes made since the prior Form 990-EZ was filed, or that weren’t reported on any prior Form 990, and that were made before the end of the tax year.

Examples of significant changes to the organizing or governing documents include changes to:

Examples of insignificant changes made to organizing or governing documents that aren’t required to be reported here include changes to the organization's registered agent with the state and to the required or permitted number or frequency of governing body or member meetings.

Describe significant changes on Schedule O (Form 990), but don’t attach a copy of the amendments or amended document to Form 990-EZ (or recite the entire amended document verbatim), unless such amended documents reflect a change in the organization's name. See the instructions for Item B, earlier, regarding attachments required in the event of a change in the organization's name; these attachments must be conformed copies of the original documents.

A conformed copy is one that agrees with the original document and all amendments to it. If the copies aren’t signed, they must be accompanied by a written declaration signed by an officer authorized to sign for the organization, certifying that they are complete and accurate copies of the original documents. Photocopies of articles of incorporation showing the certification of an appropriate state official need not be accompanied by such a declaration. See Rev. Proc. 68-14, 1968-1 C.B. 768, for details.

In some cases, if the exempt organization changes its legal structure, such as from a trust to a corporation, the new legal entity must file a new exemption application to establish that it qualifies for exemption. However, the IRS no longer requires a new exemption application from a domestic 501(c) organization that undergoes certain changes of its form or place of organization described in Rev. Proc. 2018-15, 2018-9 I.R.B. 379, available at IRS.gov/irb/2018-09_IRB.

Lines 35a and 35b. Unrelated Business Income

Political organizations described in section 527 aren’t required to answer these questions.

Check “Yes” on line 35a if the organization's total gross income from all of its unrelated trades and businesses is $1,000 or more during the tax year. See Pub. 598 for a description of unrelated business income, and see the Instructions for Form 990-T for the filing requirements of Form 990-T.

If the organization answered “Yes” to line 35a but answered “No” to line 35b because it didn’t file a Form 990-T for the tax year, then explain in Schedule O (Form 990) why the organization didn’t file a Form 990-T.

If the organization had income from business activities, such as those reported on lines 2, 6a, and 7a (among others), but not reported on Form 990-T, explain in Schedule O (Form 990) the reasons for not reporting the income on Form 990-T.

Neither Form 990-T nor Form 990-EZ is a substitute for the other. Items of income and expense reported on Form 990-T must also be reported on Form 990-EZ (and vice versa) when the organization is required to file both forms.

All tax-exempt organizations must pay estimated taxes on their unrelated business income if they expect their tax liability to be $500 or more.

Line 35c. Section 6033(e) Tax for Lobbying Expenditures

If the organization checks “No” to line 35c, it is certifying that it wasn’t subject to the notice and reporting requirements of section 6033(e) and that the organization had no lobbying and political expenditures potentially subject to the proxy tax.

Line 36. Liquidation, Dissolution, Termination, or Significant Disposition of Net Assets

If there was a liquidation, dissolution, termination, or significant disposition of net assets, enter “Yes” and complete and attach the applicable parts of Schedule N (Form 990).

For a complete liquidation, dissolution, termination, or cessation of operations, also check the “Final return/terminated” box in the heading of the return.

A “significant disposition of net assets” is a sale, exchange, disposition, or other transfer of more than 25% of the FMV of the organization's net assets during the year, regardless of whether the organization received full or adequate consideration. A significant disposition of net assets may result from either an expansion or contraction of operations. A significant disposition of net assets involves:

Examples of the types of transactions that are significant dispositions of net assets required to be reported on Schedule N (Form 990), Part II, include:

An organization filing Form 990-EZ need not complete Schedule N (Form 990), Part II, for a transaction that isn’t a significant disposition of net assets.

The following aren’t considered significant dispositions of net assets for purposes of Schedule N (Form 990), Part II.

Line 37. Expenditures for Political Purposes

Political organizations described in section 527 aren’t required to answer this question.

A political expenditure is one intended to influence the selection, nomination, election, or appointment of anyone to a federal, state, or local public office, or office in a political organization, or the election of Presidential or Vice Presidential electors. It doesn’t matter whether the attempt succeeds.

An expenditure includes a payment, distribution, loan, advance, deposit, or gift of money, or anything of value. It also includes a contract, promise, or agreement to make an expenditure, whether or not legally enforceable.

Line 38. Loans to or From Officers, Directors, Trustees, and Key Employees

Enter the end-of-year unpaid balance of secured and unsecured loans made to or received from officers, directors, trustees, and key employees (as defined in Part IV, earlier). For example, if the organization borrowed $1,000 from one officer and loaned $500 to another, none of which has been repaid, report $1,500 on line 38b.

For loans outstanding at the end of the year, complete and attach Schedule L (Form 990), Part II. See the Instructions for Schedule L (Form 990).

Report any interest expense paid to an officer, director, trustee, or key employee on line 16 (except for mortgage interest reportable on line 14) and any interest income paid by an officer, director, trustee, or key employee on line 8.

Line 39. Section 501(c)(7) Organizations

Line 40a. Section 501(c)(3) Organizations: Disclosure of Excise Taxes Imposed Under Section 4911, 4912, or 4955

Section 501(c)(3) organizations must disclose any excise tax imposed during the year under section 4911 (excess lobbying expenditures); 4912 (disqualifying lobbying expenditures); or, unless abated, 4955 (political expenditures). See sections 4962 and 6033(b).

Line 40b. Section 501(c)(3), 501(c)(4), and 501(c)(29) Organizations: Disclosure of Section 4958 Excess Benefit Transactions and Excise Taxes

Answer “Yes” if the organization became aware, prior to filing this return, that it engaged in an excess benefit transaction with a disqualified person in the current tax year or in a prior year, and if the transaction hasn’t been reported on any of the organization's prior Forms 990 or 990-EZ.

Sections 6033(b) and 6033(f) require section 501(c)(3) and 501(c)(4) organizations to report the amount of taxes imposed under section 4958 (excess benefit transactions) involving the organization, unless abated, as well as any other information the Secretary may require concerning those transactions.

If the organization answers “Yes,” then complete and attach Schedule L (Form 990), Part I.

An excess benefit transaction can have serious implications for the disqualified person that entered into the transaction with the organization, any organization managers that knowingly approved of the transaction, and the organization itself. A section 501(c)(3), 501(c)(4), or 501(c)(29) organization that becomes aware that it may have engaged in an excess benefit transaction should obtain competent advice regarding section 4958, pursue correction of any excess benefit, and take other appropriate steps to protect its interests with regard to such transaction and the potential impact it could have on the organization's continued exempt status. See Appendix E: Section 4958 Excess Benefit Transactions, later, for a discussion of section 4958, and Schedule L (Form 990), Part I, about reporting excess benefit transactions.

Line 40c. Taxes Imposed on Organization Managers or Disqualified Persons

Enter the amount of taxes imposed on organization managers and/or disqualified persons under sections 4912, 4955, and 4958, unless abated.

Line 40d. Taxes Reimbursed by the Organization

Enter the amount of tax on line 40c that was reimbursed by the organization. Any reimbursement of the excise tax liability of a disqualified person or organization manager will be treated as an excess benefit unless:

Line 40e. Tax on Prohibited Tax Shelter Transactions

Answer “Yes” if the organization was a party to a prohibited tax shelter transaction as described in section 4965(e) at any time during the organization's tax year. An organization that files Form 990-EZ (other than a section 527 political organization) and that is a party to a prohibited tax shelter transaction must file Form 8886-T, Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction, and may also have to file Form 4720 and pay excise tax imposed by section 4965. For more information, see the instructions for Forms 8886-T and 4720.

Line 41. List of States

List each state where the organization is filing a copy of this return in full or partial satisfaction of state filing requirements.

Line 42a. Location of Books and Records

Provide the name of the person who possesses the organization's books and records. The organization isn’t required to provide the address or telephone number for the personal residence of an individual. The organization's address and phone number can be used instead, or the business address and telephone number of such individual.

Line 42b. Foreign Financial Accounts

Answer “Yes” if either item 1 or 2 below applies.

If “Yes,” enter the name of the foreign country or countries. Continue on Schedule O (Form 990) if more space is needed.

If “Yes,” file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), electronically with the Department of the Treasury using FinCEN's BSA E-Filing System. Because FinCEN Form 114 isn’t a tax form, don’t file it with Form 990-EZ. See FINCEN.gov for more information.

Line 43. Section 4947(a)(1) Nonexempt Charitable Trusts

A section 4947(a)(1) nonexempt charitable trust that has no taxable income under subtitle A can use Form 990-EZ to meet its section 6012 filing requirement by checking the box on line 43 (in which case Form 1041 isn’t required). In such case, enter on line 43 the total of exempt-interest dividends received or accrued (if reporting under the accrual method of accounting) during the tax year. Such tax-exempt interest includes exempt-interest dividends received from a mutual fund or other regulated investment company as well as tax-exempt interest received directly.

Section 4947(a)(1) nonexempt charitable trusts must complete all sections of the Form 990-EZ and schedules that 501(c)(3) organizations must complete. All references to a section 501(c)(3) organization in the Form 990-EZ, schedules, and instructions include a section 4947(a)(1) trust (for instance, such a trust must complete Schedule A (Form 990)), unless expressly excepted.

Trust fund recovery penalty.

If certain excise, income, social security, and Medicare taxes that must be collected or withheld aren’t collected or withheld, or these taxes aren’t paid to the IRS, a trust fund recovery penalty may apply. The trust fund recovery penalty may be imposed on all persons (including volunteers) who the IRS determines were responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so.

This penalty doesn’t apply to volunteer unpaid members of any board of trustees or directors of a tax-exempt organization if these members are solely serving in an honorary capacity, don’t participate in the day-to-day or financial activities of the organization, and don’t have actual knowledge of the failure to collect, account for, and pay over these taxes. However, the preceding sentence doesn’t apply if it results in no person being liable for the penalty.

The penalty is equal to the unpaid trust fund tax. See Pub. 15 (Circular E) for more details, including the definition of responsible persons.

Line 44a. Donor Advised Funds

A sponsoring organization of a donor advised fund must file Form 990 rather than Form 990-EZ, regardless of the amount of its gross receipts or net assets.

A sponsoring organization is any of the following types of organizations if it maintains one or more donor advised funds.

A “donor advised fund” is a fund or account:

A donor advised fund doesn’t include any fund or account:

A “donor advisor” is any person appointed or designated by a donor to advise a sponsoring organization on the distribution or investment of amounts held in the donor's donor advised fund or similar account.

Line 44b. Hospital Facilities

If the organization operated one or more hospital facilities during the tax year, it must complete and file Form 990 and Schedule H (Form 990) and not Form 990-EZ.

A “hospital facility” is a facility that is required to be licensed, registered, or similarly recognized by a state as a hospital. This includes a hospital that is operated through a disregarded entity or joint venture treated as a partnership for federal tax purposes. It doesn’t include hospitals that are located outside the United States. It also doesn’t include hospitals that are operated by entities organized as separate legal entities from the organization that are treated as corporations for federal tax purposes.

Lines 44c and 44d. Payments for Indoor Tanning Services

The organization should check “Yes” for line 44c if it received any payments during the year for indoor tanning services. “Indoor tanning services” are services employing any electronic product designed to incorporate one or more ultraviolet lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning.

If an organization received a payment for services for indoor tanning services during the year, it must collect from the recipient of the services a tax equal to 10% of the amount paid for such service, whether paid by insurance or otherwise, and remit such tax quarterly to the IRS by filing Form 720, Quarterly Federal Excise Tax Return. If the organization filed Form 720 during the year, it should check “Yes” to line 44d. If it answers “No” to line 44d, it should explain in Schedule O (Form 990) why it didn’t file Form 720.

Line 45a. Section 512(b)(13) Controlled Entity

Answer “Yes” if the organization had a controlled entity within the meaning of section 512(b)(13) during the tax year. A “controlled entity within the meaning of section 512(b)(13)” may be a stock or nonstock corporation, association, partnership, LLC, or trust of which the controlling organization owns more than 50% of:

For the definition of “control” in this context, see section 512(b)(13)(D) and Regulations section 1.512(b)-1(l)(4) (substituting “more than 50%” for “at least 80%” in the regulations, for purposes of this definition). For the definition of “control of a nonprofit organization,” see the instructions for line 49, later.

Line 45b. Transactions With a Section 512(b)(13) Controlled Entity

A controlling organization of a controlled entity under section 512(b)(13) must file Form 990 and Schedule R (Form 990), Related Organizations and Unrelated Partnerships, rather than Form 990-EZ, if the controlling organization either:

The organization should check “Yes” to line 45b only if transactions with the controlled entity are described in (1) or (2) above. That organization should file Form 990 and Schedule R (Form 990). If transactions with the controlled entity are not described in (1) or (2), the organization isn’t precluded from filing Form 990-EZ because of those transactions, and should check “No” to line 45b.

Line 46. Political Campaign Activities

Answer “Yes” and complete the applicable parts on Schedule C (Form 990), Part I, if the organization participated or intervened in (including the publishing of statements) any political campaign on behalf of (or in opposition to) any candidate for public office, directly or indirectly. See the Instructions for Schedule C (Form 990) for a discussion of political activity.

Line 47. Lobbying Activities

Answer “Yes” and complete Schedule C (Form 990), Part II, if the organization engaged in lobbying activities or had a section 501(h) election in effect during the tax year. All section 501(c)(3) organizations that had a section 501(h) election in effect during the tax year must complete Schedule C (Form 990), Part II-A, regardless of whether they engaged in lobbying activities during the tax year. See the Instructions for Schedule C (Form 990) for a discussion of lobbying activities.

Line 48. Schools

Answer “Yes” and complete Schedule E (Form 990) if the organization checked the box on Schedule A (Form 990), Part I, line 2, indicating that it is a school.

Line 49. Transfers to Exempt Non-Charitable Related Organizations

Answer “Yes” if the organization made any transfer to a related organization that is an exempt organization other than a 501(c)(3) organization, such as a related 501(c)(4) organization or a related 527 political organization.

A transfer for this purpose is any transaction or arrangement in which the organization transferred something of value (cash, other assets, services, use of property, etc.) to the exempt non-charitable related organization, whether or not for adequate consideration. The organization can (but isn’t required to) explain the transfer in Schedule O (Form 990).

For purposes of Form 990-EZ, a related organization is an organization (including a nonprofit organization, a stock corporation, a partnership or LLC, a trust, and a governmental unit or other governmental entity) that is in one or more of the following relationships to the filing organization at any time during the tax year.

For purposes of determining whether an organization is related, control exists in the following situations.

Control can be indirect. For example, if the filing organization controls Entity A, which in turn controls Entity B, the filing organization will be treated as controlling Entity B. To determine indirect control through constructive ownership of a corporation, rules under section 318 apply. Similar principles apply for purposes of determining constructive ownership of another entity (a partnership or trust). If an entity X controls an entity treated as a partnership by being one of three or fewer partners or members, then an organization that controls X also controls the partnership.

See Regulations sections 301.7701-2, -3, and -4 for more information on classification of corporations, partnerships, disregarded entities, and trusts.

Line 50. Five Highest Compensated Employees Over $100,000

Complete this table for the five employees (other than officers, directors, trustees, and key employees as defined in the Part IV instructions, earlier) with the highest annual compensation over $100,000. On line 50f, enter the number of other employees (other than officers, directors, trustees, and key employees) with annual compensation over $100,000 who aren’t individually listed.

A fiscal-year organization must use the calendar year ending within its tax year to determine its five highest compensated employees over $100,000, and to report the compensation. Combine the compensation includible in Part VI, columns (c), (d), and (e), in determining whether compensation exceeds $100,000 for the calendar year.

See the Part IV instructions, earlier, for more information on compensation reporting and for completing table columns (a) through (e) of line 50, and for information on the $10,000-per-item exception for column (e).

See Pub. 525 for more information.

Line 51. Five Highest Compensated Independent Contractors Over $100,000

Complete this table for the five highest compensated independent contractors that received more than $100,000 in compensation for services, whether professional services or other services, from the organization. On line 51d, enter the number of other independent contractors with annual compensation over $100,000 that aren’t individually listed.

Independent contractors include organizations as well as individuals and can include professional fundraisers, law firms, accounting firms, publishing companies, management companies, and investment management companies. Do not report public utilities or insurance providers as independent contractors. See Pub. 1779, Independent Contractor or Employee, and Pub. 15-A, Employer's Supplemental Tax Guide, for distinguishing employees from independent contractors.

The organization must use the calendar year ending with or within its tax year in determining its five highest compensated independent contractors and reporting their compensation in such year on line 51.

Paid Preparer

Generally, anyone who is paid to prepare the return must sign the return, list the preparer taxpayer identification number (PTIN), and fill in the other blanks in the Paid Preparer Use Only area. An employee of the filing organization isn’t a paid preparer.

The paid preparer must:

Any paid preparer can apply for and obtain a PTIN online at IRS.gov/PTIN or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal.

Enter the paid preparer’s PTIN, not the social security number (SSN), in the “PTIN” box in the paid preparer’s block. The IRS won’t redact the paid preparer’s SSN if such SSN is entered on the paid preparer’s block. Because Form 990-EZ is a publicly disclosable document, any information entered in this block will be publicly disclosed (see Appendix D).

Paid Preparer Authorization

On the last line of Form 990-EZ, check “Yes” if the IRS can contact the paid preparer who signed the return to discuss the return. This authorization applies only to the individual whose signature appears in the Paid Preparer Use Only section of Form 990-EZ. It doesn’t apply to the firm, if any, shown in that section.

By checking this box “Yes,” the organization is authorizing the IRS to contact the paid preparer to answer any questions that may arise during the processing of the return. The organization is also authorizing the paid preparer to:

The organization isn’t authorizing the paid preparer to bind the organization to anything or otherwise represent the organization before the IRS.

The authorization will automatically end no later than the due date (excluding extensions) for filing the organization's 2024 Form 990-EZ. If the organization wants to expand the paid preparer's authorization or revoke the authorization before it ends, see Pub. 947, Practice Before the IRS and Power of Attorney.

Check “No” if the IRS is to contact the organization at the address or telephone number listed in the heading, rather than the paid preparer.