Changes for 2018 990

Posted on Wednesday, February 06, 2019

According to the IRS draft instructions for Form 990 that were released on September 7, 2018, the following changes have been made to Form 990 for 2018.  The first two changes are a result of the 2017 Tax Cuts and Jobs Acts, while the third relates to the new nonprofit FASB standard.

Excise taxes on executive compensation.

Part V, Statements Regarding Other IRS Filings and Tax Compliance, line 15 asks a new question as to whether the organization paid any covered employees more than $1,000,000 in remuneration or paid an excess parachute payment during the year.Remuneration paid to a covered employee includes any remuneration paid by a related organization.

Excise tax on net investment income of certain colleges and universities.

Part V, Statements Regarding Other IRS Filings and Tax Compliance, line 16 is a new question relating to private colleges and universities subject to excise tax on net investment income under section 4968.

FASB changes, Part X

Part X, Balance Sheet, lines 27-29 regarding net assets, will not be updated for the financial statement reporting changes under Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Not-for-Profit Entities.The IRS instructs organizations to include on line 28, temporarily restricted net assets the balance per books of net assets with donor-imposed restrictions that may require resources to be used after a specified date (time restrictions), or used for a specified purpose (purpose restrictions), or both.Organization my also opt to leave line 28 blank and report all net assets subject to donor-imposed restrictions on line 29, permanently restricted net assets.

Increase in UBTI by disallowed fringe.

For organizations that have employees, unrelated business taxable income (UBTI) reported on Form 990-T is increased by any amount for which a deduction is not allowed because of IRC Section 274, Disallowance of Certain Entertainment, Etc., Expenses and which is paid or incurred by the organization after December 31, 2017 for any qualified transportation fringe, any parking facility used in connection with qualified parking, or any on-premises athletic facility.See DWD’s Mission Minded blog, Qualified Transportation Fringes for Nonprofits for more information.

Changes to Schedule B.

Tax-exempt organizations, other than section 501(c)(3) organizations are no longer required to report the names and addresses of their contributors on Schedule B, Schedule of Contributors for tax years ending on or after December 31, 2018.

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

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