Annual Filing Requirements for Nonprofits (2024)

FAQs

What is needed in an annual report for a nonprofit? ›

Almost all charitable nonprofits that are recognized as tax-exempt by the IRS are required to file an annual report with the IRS, known as the “Form 990.” The IRS Form 990 is a public document that is available on GuideStar, and also from the charitable nonprofit, upon request, in accordance with IRS “public disclosure ...

A tax-exempt organization must file an annual information return or notice with the IRS, unless an exception applies. Annual information returns for most types of organizations include Form 990, Form 990-EZ or Form 990-PF.

Your annual report should include four main components: the chairman's letter, a profile of your business, an analysis of your management strategies, and your financial statements.

Nonprofits with annual revenue of less than $200,000 and assets valued at less than $500,000 may file the Form 990-EZ, or may elect to file the Form 990. Nonprofits with annual revenue of $500,000 or more must file the Form 990.

The numbers pulled for your nonprofit balance sheet all come from your organization's chart of accounts, which lists out all of your accounts and ledgers to keep your finances in order. Then, these numbers are organized into the three sections of the report (assets, liabilities, and net assets).

Yes, nonprofit corporations are required to make their financial statements available to the public. Form 990 includes a nonprofit's figures for revenue, expenses, assets, and liabilities, and all 501(c)(3) nonprofits are required to submit Form 990 to the IRS annually.

Do nonprofits have to publish salaries? ›

Salaries are public record

Nonprofits that file Form 990 or 990-EZ are required to report the compensation of its highest paid staff members. Since this information is public record, potential donors can look to see if staff salaries are reasonable and compare how much the nonprofit spends for programs versus salaries.

Nonprofit corporation that applied for and obtained tax exemption: If your organization applied for and obtained 501(c)(3) tax exemption from the IRS, you must file annual returns to maintain your exemption. Depending on the amount of your organization's gross receipts, you must file Form 990, 990-EZ, or 990-N.

An organization that normally has $50,000 or more in gross receipts and that is required to file an exempt organization information return must file either Form 990, Return of Organization Exempt from Income TaxPDF, or Form 990-EZ, Short Form Return of Organization Exempt from Income TaxPDF.

The IRS may initiate an audit if it feels fundraising expenses are not in proper proportion to fundraising income. Most nonprofit organizations are aware that the IRS frowns on unusually high executive compensation.

Annual reports typically include financial statements, statements from the CEO and Board Chair, and key activities and accomplishments.

The element that is NOT typically part of an Annual Report is Press releases from the Company. The Annual Report is meant to provide shareholders and other interested parties with a detailed look into a company's financial activities over the past year.

Charitable nonprofits that expend $750,000 or more in federal funds in a year are subject to special audit requirements. Some contracts with state and local governments to provide services in the community may require the nonprofit to conduct an independent audit.