It’s not spring yet, but it’s never too soon for tax-exempt organizations to start thinking about Form 990 filing. This year, the form includes some changes largely stemming from the Tax Cuts and Jobs Act.
- Executive compensation excise tax: Exempt organizations paying more than $1 million in compensation to a covered employee now must pay an excise tax of 21 percent on the excess amount. This is covered on the Form 990, Part V, Line 15.
- Net investment income tax: Certain private universities—those with at least 500 full-time tuition-paying students and that has at least $500,000 endowment per students—now are subjected to a 1.4 percent excise tax on their net investment income. This is covered on the Form 990, Part V, Line 16.
- Increase in UBTI: For exempt organizations that have employees, unrelated business taxable income (UBTI) is increased by the amount of any qualified transportation fringe (as defined in section 132(f)), or any parking facility used in connection with qualified parking (as defined in section 132(f)(5)(C)), or any on-premises athletic facility (as defined in section 132(j)(4)(B)).
In addition, Schedule B to the form has been updated to reflect that many exempt organizations no longer need to report donor information to the IRS. Importantly, 501(c)(3) organizations and 527 political organizations still need to report donor information on this schedule.
Click here for a link to the Form 990 Instructions.