What Schools need to know about Form 990 Filing?
This article further explores the following points:
IRS Mandates Schools to file Form 990 Electronically.
IRS Form 990 Filing Requirements
for Schools
- Updated April 21, 2023 - 5.00 PM Admin, ExpressTaxExempt
Any organizations that meet the requirements of the IRS section 501(c)(3) are considered charitable organizations and are provided with tax-exempt status.
In this article, we will cover which types of schools are eligible for tax-exempt status, their filing requirements, and more.
Table of Content
1. What does the IRS consider a school?
According to the IRS, the term “school” includes educational organizations that meet the requirements of section 170(b)(1)(A)(ii).
Schools are required to have and maintain a regular facility and curriculum. It is also necessary for schools to regularly enroll a group of students in attendance at the place where their educational activities are regularly carried on.
All the federal, state, and public schools that meet these requirements fall under section 170(b)(1)(A)(ii).
Some of these organizations are:
- Federal Schools
- State Schools
- Public Schools
- Internal Audit Check
- Colleges and universities
- Preparatory Schools and High Schools
- All other instructional institutions
Note: Organizations whose primary purpose is medical research, collection of a particular element, or any other function and the secondary purpose is an educational activity then the organization does not qualify as an educational organization under section 170(b)(1)(A)(ii).
2. Are Schools Tax-Exempt?
Yes! The IRS recognizes schools as tax-exempt under section 501(c)(3).
To learn more about 501(c)(3) status, click here.
For a school to be considered a public charity under section 501(c)(3) and to be mentioned as an educational organization under section 170(b)(1)(A)(ii), it has to adopt a racially nondiscriminatory policy and operate in accordance to it.
The main objective of the racial nondiscriminatory policy is to ensure that equal rights and privileges are made available to all students, regardless of their race. This policy should be followed at all times and in all school operations, including admissions, scholarships, athletics, etc.
3. Unique Non-Profit activities
In order to obtain 501(c)(3) tax-exempt status, schools are required to file Form 1023 with the IRS. They will receive a determination letter from the IRS confirming their tax-exempt status.
How to file Form 1023?
Here are the steps to file Form 1023:
- Register for an account on Pay.gov
- Enter “1023” in the search box and select it.
- Complete the form.
For more information about Form 1023, Visit Here
4. 990 Filing requirements for Tax-Exempt Schools
All the schools that have obtained tax-exempt status from the IRS under section 501(c)(3) are required to file a Form 990 series return to report their annual information to the IRS.
Based on their gross receipts and assets, the schools may file different versions of the 990 form.
| Form 990-N |
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| Form 990-EZ |
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| Form 990 |
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What are the additional filing requirements for schools?
Schools are required to attach Schedule E to their Form 990 to report their policies, facilities, and benefits. They may have to attach a few other Schedules as well, depending on their financial activities and operational characteristics.
Click here to learn more about Schedules.
When should Schools file their Form 990?
The due date for the schools to file Form 990 is the 15th day of the 5th month after the tax period ends.
To learn more about the deadline for filing Form 990, visit here.
ExpressTaxExempt - The Perfect Solution to Meet the Form 990
Requirements for Schools
- Simplify your form 990 filing process, ExpressTaxExempt, the market-leading, IRS-authorized e-file provider, offers numerous helpful features.
- If you have filed your 990 forms with us previously, you can copy certain Information from those returns.
- Our system generates the required Schedules automatically when you start filing your form 990.
- You can invite your team members to edit, manage, review and approve your 990 returns.
- We will keep you updated on the status of your form by sending you text notifications and emails.
- If you have questions while filing, you can reach out to our customer support team via live chat, phone, and email.
