Q:
|
What is unrelated business income for tax-exempt non-profit organizations?
|
A:
|
For non-profit organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization's exemption. Even though a non-profit organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income by filing Form 990-T.
|
Q:
|
Do all exempt organization with unrelated business income must file Form 990-T to IRS?
|
A:
|
Generally, an exempt organization that has $1,000 or more of gross income from an unrelated business must file Form 990-T. An organization filing Form 990-T must make installment payments of estimated tax if its estimated tax is expected to be $500 or more.
|
Q:
|
What information must disclose on Form 990-T?
|
A:
|
Form 990-T requires the organization to disclose unrelated trade or business income, deductions directly connected with the unrelated business trade or income. An organization with more than one unrelated trade or business should attach separate schedules for each additional trade or business to disclose the necessary information.
|
|
Q:
|
When is the Form 990-T due?
|
A:
|
For most exempt organizations, Form 990-T is due annually by the 15th day of the 5th month after the end of its tax year, although there are exceptions, such as an employee’s trust defined in section 401(a) is due by the 15th day of the 4th month after the end of its tax year. Filers may request an automatic extension of time to file Form 990-T by using Form 8868.
|
Q:
|
Any penalty if fails to file Form 990 Series?
|
A:
|
Yes. Your organization may be subject to interest and penalty charges if it files a late return or fails to pay tax when due. Generally, the organization isn't required to include interest and penalty charges on Form 990-T because the IRS can figure the amount and bill the organization for it.
|
FAQ
