2020 Form 990-T Revisions

Nonprofits that have unrelated business income must file Form 990-T, Exempt Organization Business Income Tax Return, with the IRS to report this income and their tax liability.  The IRS has revised Form 990-T for tax year 2020 (filed in 2021).  

The significant revisions include:

• Mandatory electronic filing of Form 990-T for the 2020 tax year will begin in February 2021.  Limited exceptions apply, such as amended returns prior to the period electronic returns were required. 
• Improved reporting for consistency with the “siloing” rules put into place by the Tax Cuts and Jobs Act.  The tax computation for each trade or business will now be reported on a separate Schedule A, Unrelated Business Taxable Income From an Unrelated Trade or Business.  The new Schedule A is similar to prior years’ Schedule M, Unrelated Business Taxable Income from an Unrelated Trade or Business.

You can review the 2020 revised forms (still in draft form) at the IRS website.

• 2020 IRS Form 990-T (draft) – https://www.irs.gov/pub/irs-dft/f990t–dft.pdf
• 2020 IRS Form 990-T, Schedule A (draft) – https://www.irs.gov/pub/irs-dft/f990tsa–dft.pdf

Visit our previous blog, Unrelated Business Income, to find out if your organization has unrelated business income.  

Contributed by: Carrie Minnich, CPA, MAcct | Director | DWD CPAs & Advisors