IRS Form 990 is obviously one of the most important documents for tax-exempt organizations. However, there are certain limitations as to when churches are even subject to filing this form. In this content, we will go over every aspect of Form 990, from why churches want to file it to when they are required to do so.

https://www.irs.gov/pub/irs-pdf/f990.pdf

What is Form 990?

Most tax-exempt organizations, such as charities and religious groups, have to file Form 990, which is a tax return that provides information about the organization's finances, activities, and governance. Filing Form 990 ensures greater disclosure and openness by the organization. 

Although churches are typically exempt from the filing requirement, some may opt to file the form in order to increase their transparency and accountability.

https://www.efile990.com/ 

Are Churches Required to File Form 990?

Most of the time, churches don't have to file Form 990. Generally, religious institutions such as churches, synagogues, mosques, etc., are exempted by the IRS from filing Form 990, mainly because the IRS recognizes them as "religious." Apart from that, they usually have a distinctive non-profit organizational structure. However, a few churches may decide to submit Form 990 as a means of greater openness in divulging their operations and financial condition.

https://www.irs.gov/charities-non-profits/churches-religious-organizations/filing-requirements-for-churches-and-religious-organizations

What Conditions Must a Church Meet to Be Exempt from Filing Form 990?

Churches do not have to submit Form 990 if they fulfill the following criteria: 

Religious Organizations: It should be a church or a religious institution according to definition by the IRS.

Tax-Exempt Status: The church has to be a 501(c)(3) tax-exempt organization. Generally, churches get this status automatically.

Not Engaged in Excessive Unrelated Business Activities: A church should not derive a significant portion of its income through activities unrelated to its religious purpose (e. g. excessive commercial ventures).

Annual Gross Receipts Under $200,000: Churches with annual gross receipts of less than $200,000 and total assets of less than $500,000 may still be exempt from filing Form 990, but they may be required to submit a "Form 990-N" (e-postcard) for annual reporting.

https://efile990.com/about-990N-form 

Even if a church does not meet these criteria, it is still subject to certain state regulations, and transparency laws may encourage the voluntary submission of Form 990.

Why Can Churches Choose to File Form 990?

Although churches are exempt from filing Form 990, some still decide to do so voluntarily. Here are the reasons that might explain their decision:

Transparency: Wouldn't it be nice if, through the filing of Form 990, churches could present to the public, especially donors and other stakeholders, a clear account of their financial status and church activities? This kind of openness is likely to build trust in the community.

Donor Confidence: Donors may be more willing to give when the church shows its responsibility by filing Form 990. It gives them the confidence that their money is being managed properly.

Meeting State Requirements: While the federal government does not require it, some states mandate religious organizations to publicly disclose their finances for the purpose of keeping their charitable status.

Access to Grants: There are grant-giving institutions that not only prefer but even require organizations to submit a copy of their latest Form 990 for them to consider their grant application.

Therefore, even though it is not required, submitting Form 990 could be a wise choice to remain transparent, gain the trust of the public or fulfill the criteria imposed by state agencies or funders.

Which Form 990 Can Be Filed by Churches?

Churches normally file one of the following types of Form 990 based on their size and financial capacity:

Form 990: Churches with gross receipts over $200,000 and assets over $500,000 will generally have to file form 990.

https://efile990.com/about-990-form 

Form 990-EZ: Form 990 EZ is a Simplified Form 990, frequently churches file it when they have gross receipts from $100,000 to $200,000 and assets from $250,000 to $500,000.

https://efile990.com/about-990EZ-form 

Form 990-N (e-Postcard): If a church's total revenue is less than $200,000 and its assets less than $500 000 the IRS permits the church to issue a very simple version of the 990, i. e. the e-Postcard (the term used for Form 990-N).

Each of these forms requires different levels of detail and documentation, so it’s essential for churches to choose the correct form based on their financial standing.

How Can Form 990 Be Filed Easily?

Form 990 can be filed quickly and easily using an IRS-Authorized 990 portal like efile990. Here are some benefits of using our 990 online platform for filing:

https://www.efile990.com/

IRS-Authorized: Ensure compliance with IRS regulations and avoid penalties for inaccurate or late filings.

No Software Download: File Form 990 without needing to download any software. Simply log in, complete the necessary information, and submit.

Easy Filing Process: The platform guides you step by step, simplifying the complex tax filing process.

Affordable Solution: Cost-effective pricing for tax-exempt organizations, making it accessible for churches of all sizes.

Conclusion

Apart from not being mandated to submit Form 990, churches could voluntarily decide to do so for the sake of transparency, building donor trust, or meeting the requirements of certain states. 

Through the submission of the appropriate Form 990 version, churches are able to maintain their compliance not only with the IRS but also with their local community.