Time to file Form 990

Time to file Form 990

December 30, 2019 | Financial Management

Charters are required to file Form 990 every year, and your organization’s form is due on the 15th day of the fifth month after the end of the charter’s taxable year.

There are two deadlines for filing this form depending on the fiscal year of the charter school.  For those charters beginning July 1, the deadline was November 15, 2019 and those charters beginning September 1 have a January 15, 2020 deadline.  It is possible to file an extension (IRS Form 8868) by the stated due date which will extend the filing requirement to May 15, 2020, and July 15, 2020, respectively.

Most auditors will file this form on behalf of the charter.  Be sure to check the engagement letter the charter signed with the auditor to see if this is a service the auditor will provide.  If not, talk to your auditor about filing the extension by the due date which will give the charter time to decide who will complete the form on its behalf.

What is the 990 and what is it used for?

The 990 is the IRS’ primary tool for gathering information about tax-exempt organizations, educating organizations about tax law requirements, and promoting compliance.  In addition, 990s are open to public inspection and show the public how the charter is organized and operated as a tax-exempt entity; is well-governed and managed; furthers its mission through its exempt activities and provides valuable services to the public.

What happens if we do not file the information?

Organizations are required to file an information return or annual electronic notice and organizations who fail to do so for three consecutive years will lose tax-exempt status.

What type of information will the charter need to provide?

There are many pieces of information contained in the report.  The charter will need to report information about key employees.  A “key” employee is anyone who received over $150,000 in reported compensation by the charter or related organization and had control of 10% or more of the organizations, assets, income, expenses, activities, budget, expenses, or employee compensation.  The charter will provide details on its officers, directors, and trustees. Director and trustees are the charters governing board and only those members with voting rights are included.  All compensation paid to the officers, directors, trustees, and key employees will be required.  Relationships with family and business relationship between them are needed, grants and other assistance provided to this group and business transactions between the charter and this group will be needed.  The charter will also provide information on the five highest compensated employees as well as the five highest-paid independent contractors.

Charter School Success does not file these forms on behalf of our charters.  We assist in giving financial information to the auditors on behalf of our clients.

Questions?