How to Fill Out your 2023
Form 990-T?

Line 1- 11 of Part I requires information about your organization’s unrelated business income.

• Line 1 - Total of Unrelated Business Taxable Income computed from all Unrelated Trades or Businesses

  It requires information about your organization’s unrelated business income. If your organization has only one unrelated trade or business, enter the amount from Schedule A (IRS Form 990-T), Part II, line 18; if more than one unrelated trade or business, enter the sum of the positive amounts from all Schedules A, Part II,
  line 18.

• Line 2 - Reserved for future use

  The IRS has not specified their plans for this line, but has instructed employers to leave it blank.

• Line 3 - Total

  Add Line 1 and 2 and enter the total.

• Line 4 - Charitable Contributions

  On this line, enter contributions or gifts paid within the tax year to or for the use of charitable and governmental organizations described in section 170(c). Also, enter any unused contributions carried over from previous years.

• Line 5 - Total of Unrelated Business Taxable Income before Net operating Losses

  Subtract line 4 from line 3 and enter that value. This is the Total unrelated business taxable income before net operating losses.

• Line 6 - Deduction for Net Operating Loss

  Enter the smaller of (a) the amount of net operating losses arising in tax years beginning before January 1, 2018, or (b) the amount shown on Part I, line 1.

• Line 7 - Total of unrelated business taxable income before specific deduction and section 199A deduction

  Subtract line 6 from line 5 and enter that value.

• Line 8 - Specific Deduction

  Claim a specific deduction amount. Each specific deduction will be the smaller of $1,000 or the gross income from any unrelated trade or business the local unit conducts. If you claim a total specific deduction larger than $1,000, attach a statement showing how you figured the amount.

• Line 9 - Trusts

  If you are a Trust filing Form 990-T and have unrelated business income, you may have Qualified Business Income (QBI) and may be allowed a QBI deduction under section 199A.

  Refer to Form 8995, Qualified Business Income Deduction Simplified Computation instructions to determine whether your organization meet the requirements for the QBI deduction and how to complete the application form.

• Line 10 - Total Deductions

  Add Line 8 and 9 and enter their sum to report Total Deductions.

• Line 11 - Unrelated business taxable income

  Subtract line 10 from line 7 and enter the value. If the value in line 10 is greater than line 7, enter zero for Line 11. This value will be your Unrelated business taxable income.

Line 1- 7 of Part II requires information about your organization’s taxable income.

• Line 1 - Organizations Taxable as Corporations.

  Multiply the amount reported on Part I, line 11 (Unrelated business taxable income) by 21% (0.21), and enter that value.

• Line 2 - Trusts Taxable at Trust Rates

  Here, Trusts alone should choose whether the income tax amount on Part I, line 11 was computed from a Tax rate schedule or Schedule D (Form 1041) and enter that value.

• Line 3 - Proxy Tax

  A proxy tax is a tax amount imposed against a tax-exempt organization that fails to correctly estimate the amount of money it will spend on lobbying activities for the tax year. Enter the proxy tax amount on this line and attach a statement showing the tax computation.

• Line 4 - Other Tax Amounts

  Enter the tax amounts that weren't reported in Part III, Line 3 of IRS Form 990-T, and attach a statement describing these tax amounts.

• Line 5 - Alternative Minimum Tax

  Only trusts liable for tax on unrelated business taxable income will be liable for an alternative minimum tax. You only need to complete this line if you're a trust liable on unrelated business taxable income.

  Also, you must attach Schedule I (Form 1041), Alternative Minimum Tax—Estates and Trusts, and enter the taxable amount from Schedule I on this line.

• Line 6 - Tax on Noncompliant Facility Income

  It requires information about tax on a hospital organization’s non-compliant facility income. This tax is an income tax that is separate from the excise tax on a failure to meet the community health needs assessment (CHNA) requirements of section 501(r)(3) that is reported on Form 4720.

• Line 7 - Total

  Add the values entered on lines 3 through 6 to line 1 or 2, whichever applies, and enter that amount in line 7. The value entered in this line is the Total Tax Computation.

Part III of IRS Form 990-T requires information about the tax amount your organization
owes the IRS.

Line 1, Part III consists of 5 sub-sections

• Line 1a - Foreign Tax Credit

  Enter the foreign tax credit and attach Form 1118 if you function as a corporation;
  Form 1116 if you function as a trust.

• Line 1b - Other Credits

  Enter the non-refundable credits not identified elsewhere in Part III, line 1. Also, attach a statement that lists the applicable form and the amount of the credit.

• Line 1c - General Business Credit, Attach Form 3800

  Enter the organization's total general business credit. Do not include the work opportunity credit, employee retention credit, the empowerment zone employment credit, the Indian employment credit, and the credit for employer differential wage payments.

• Line 1d - Credit for Prior Year Minimum Tax

  It requires information on the Credit for Prior Year Minimum Tax. Use Form 8801 to figure the minimum tax credit and any carryforwards of that credit for trusts. If you're a corporation, use Form 8827.

• Line 1e - Total Credits

  add Line 1a through 1d and enter the total.

• Line 2 - Total Tax Computation

  Subtract line 1e from Part II, line 7 (Total Tax Computation), and enter that value.

• Line 3 - Other Taxes

  Check the relevant check box, based on the tax amount your organization owes.

  • Check Form 4255 for recapture of investment credit
  • Check Form 8611 for recapture of low-income housing credit
  • Check Form 8697 for interest due under the look-back method
  • Check Form 8866 for interest due under the look-back method for property depreciated under the income forecast method
  • Check Other if the previous boxes do not apply. If you checked Other, attach a statement showing the computation of each item included in the total for
    Part III, line 3.

• Line 4 - Total Tax

  Add Lines 2 and 3 and enter the total. Also, include any deferred tax on the termination of a section 1294 election applicable to shareholders in a qualified electing fund in the amount entered on Part III, Line 4

• Line 5 - Net 965 Tax Liability Payments

  Check the relevant check box, based on the tax amount your organization owes.

  • For Corporations - If an election to pay the section 965 net tax liability in installments has been made under section 965(h), complete and attach Form 965-B. Enter the current year section 965 installment payment (from
    Form 965-B, Part II, column (k), line 4).
  • For Trusts- If an election to pay the section 965 net tax liability in installments has been made under section 965(h), complete and attach Form 965-A. Enter the current year section 965 installment payment (from Form 965-A, Part II, column (k),
    line 4).

Line 6, Part III consists of 7 sub-sections

• Line 6a - Payments

  Enter the 2022 overpayment credited to the 2023 tax year.

• Line 6b - Estimated Tax Payments

  Enter the total estimated tax payments made for the tax year. If your organization is the beneficiary of a trust, and the trust makes a section 643(g) election to credit its estimated tax payments to its beneficiaries, include the organization's share of the estimated tax payment in the total amount entered here. Also, attach a statement showing the amount of section 643(g) credit amount.

• Line 6c - Tax Deposited with
  Form 8868

  Enter the tax amount deposited with Form 8868.

• Line 6d - Foreign Organizations

  Enter the tax withheld on unrelated business taxable income from U.S. sources that aren’t effectively connected with a trade or business conduct within the United States.

• Line 6e - Backup Withholding

  It requires information about Backup Withholding. Suppose your organization was subject to erroneous backup withholding because the payer didn’t realize you were an exempt organization and not subject to this withholding. In that case, you can claim credit for the amount withheld by including it in this line.

• Line 6f - Credits for Small Employer Health Insurance Premiums

  Any organization described under Section 501(c) and exempt from tax under section 501(a) may be eligible to claim the refundable small employer tax credit for a percentage of certain health insurance premiums paid on its employees. A tax-exempt eligible small employer can also request refundable credits by filing and attaching Form 8941, Credit for Small Employer Health Insurance Premiums, and showing the calculation for the refundable credit amount claimed.

• Line 6g - Other Credits, Adjustments and Payments.

  Here, check the relevant check box and provide the credit information.

  • Check Form 2439 if credits are from a regulated investment company (RIC) or a real estate investment trust (REIT).
  • Check Form 4136 if the credits are for federal tax paid on fuels.

• Line 7 - Total Payments

  Add the values entered on lines 6a through 6g and enter the total.

• Line 8 - Estimated Tax Penalty

  Use Form 2220, Underpayment of Estimated Tax by Corporations, to see if the organization owes a penalty and its amount. Check the box on Line 8 if you're attaching Form 2220, and enter the penalty amount in the line.

• Line 9 - Tax Due

  Enter the Tax Due amount in Line 9, Part III. If Line 7 is smaller than the total of lines 4, 5, and 8, enter the amount owed on Line 9.

• Line 10 - Overpayment

  Enter the Overpayment amount on Line 10, Part III. If Line 7 is larger than the total of lines 4, 5, and 8, enter the amount overpaid on
  Line 10.

• Line 11 - Refunded

  Enter the amount of overpayment you want to credit to the 2021 estimated tax.

Line 1 to 4 of Part IV requires information on your organization’s various activities and changes made for the tax year.

• Line 1 - Did the organization has financial account in a Foreign country, If yes File FinCEN
  Form 114:

  Select Yes if the organization has an interest in or a signature or other authority over a financial account (bank, securities, or other) in a foreign country and enter the name of the foreign country. Also, your organization is required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) electronically with the Department of the Treasury using FinCEN's BSA E-Filing System. Since FinCEN Form 114 isn't a tax form, don't file it with Form 990-T.

• Line 2 - Organization receives a distribution from a foreign trust.

  Select Yes if your organization received a distribution from a foreign trust. Your organization may be required to file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.

• Line 3 - Report Tax-exempt received or accrued.

  Report any tax-exempt interest received or accrued. Also, include any exempt-interest dividends received as a shareholder in a mutual fund or other regulated investment company.

• Line 4a - Change in Accounting Method

  It requires information about your organization’s accounting method.

• Line 4b - Select Yes if your organization changed its accounting method

  Click the check box Yes if your organization changed its accounting method and explained the change on Form 990, 990-EZ, 990-PF, or Form 1128. If not, provide an explanation in Part V, Supplemental Information of
  IRS Form 990-T.

To change accounting methods, organizations must file Form 3115, Application for Change in Accounting Method.