Other Forms That May Be Required

2025 Instructions for Form 990-EZ 39

40 2025 Instructions for Form 990-EZ

Helpful Publications

Appendix G: Use of Form 990 or 990-EZ To Satisfy State Reporting Requirements Some states and local government units will accept a copy of Form 990 or 990-EZ in place of all or part of their own financial report forms. The substitution applies primarily to section 501(c) (3) organizations, but some of the other types of section 501(c) organizations are also affected. If the organization uses Form 990 or 990-EZ to satisfy state or local filing requirements, such as those under state charitable solicitation acts, note the following discussions.

Determine State Filing Requirements

The organization can consult the appropriate officials of all states and other jurisdictions in which it does business to determine their specific filing requirements. Doing business in a jurisdiction can include any of the following.

• Soliciting contributions or grants by mail or otherwise from individuals, businesses, or other charitable organizations.

• Conducting program.

• Having employees within that jurisdiction.

• Maintaining a checking account.

• Owning or renting property there.

Monetary Tests May Differ

Some or all of the dollar limitations applicable to Form 990 or 990-EZ when filed with the IRS may not apply when using Form 990 or 990-EZ in place of state or local report forms. Examples of the IRS dollar limitations that don’t meet some state requirements are the normally $50,000 gross receipts minimum that creates an obligation to file with the IRS and the $100,000 minimum for listing independent contractors in Form 990, Part VII, Section B; or Form 990-EZ, Part VI, line 51.

Additional Information May Be Required

State or local filing requirements may require the organization to attach to Form 990 or 990-EZ one or more of the following.

• Additional financial statements, such as a complete analysis of functional expenses or a statement of changes in net assets.

• Notes to financial statements.

• Additional financial schedules.

• A report on the financial statements by an independent accountant.

• Answers to additional questions and other information.

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Each jurisdiction may require the additional material to be presented on forms they provide. The additional information doesn’t have to be submitted with the Form 990 or 990-EZ filed with the IRS.

Even if the Form 990 or 990-EZ that the organization files with the IRS is accepted by the IRS as complete, a copy of the same return filed with a state won’t fully satisfy that state's filing requirement if (1) required information isn’t provided, including any of the additional information discussed previously; or (2) the state determines that the form wasn’t completed by following the applicable Form 990 or 990-EZ instructions or supplemental state instructions. In such case, the state may ask the organization to provide the missing information or to submit an amended return.

Use of Audit Guides May Be Required

To ensure that all organizations report similar transactions uniformly, many states require that contributions, gifts, grants, similar amounts, and functional expenses be reported according to the AICPA industry audit and accounting guide, Not-for-Profit Organizations (New York, NY, AICPA, 2003), supplemented, as applicable, by Standards of Accounting and Financial Reporting for Voluntary Health and Welfare Organizations (Washington, DC, National Health Council, Inc., 1998, 4th edition).

Donated Services and Facilities

Even though donated services and facilities may be reported as items of revenue and expense in certain circumstances, many states and the IRS don’t permit the inclusion of those amounts in Form 990, Parts VIII and IX; Form 990-EZ, Part I; or (except for such donations by a governmental unit) in Schedule A (Form 990). The optional reporting of donated services and facilities is discussed in the instructions for Part III of Forms 990 and 990-EZ.

Amended Returns

If the organization submits supplemental information or files an amended Form 990 or 990-EZ with the IRS, it must also send a copy of the information or amended return to any state with which it filed a copy of Form 990 or 990-EZ originally to meet that state's filing requirement. If a state requires the organization to file an amended Form 990 or 990-EZ to correct conflicts with the Instruction for Form 990 or 990-EZ, the organization must also file an amended return with the IRS.

Method of Accounting

Most states require that all amounts be reported based on the accrual method of accounting. See also General Instructions C. Accounting Periods and Methods .

Time For Filing May Differ

The deadline for filing Form 990 or 990-EZ with the IRS differs from the time for filing reports with some states.

Public Inspection

The Form 990 or 990-EZ information made available for public inspection by the IRS may differ from that made available by the states, such as Schedule B (Form 990).

Qualified intellectual property. An organization described in section 170(c) (except a private foundation) that receives or accrues net income from a qualified intellectual property contribution must file Form 8899, Notice of Income From

Appendix H: Contributions This appendix discusses certain federal tax rules that apply to exempt organizations and donors for contributions. See also Pub. 526 and Pub. 1771.

Schedule B (Form 990). Many organizations that file Form 990, 990-EZ, or 990-PF must file Schedule B (Form 990) to report on tax-deductible and non-tax-deductible contributions. See Schedule B (Form 990) and its instructions to determine whether Schedule B (Form 990) must be filed. See also the Instructions for Schedule B (Form 990) for the public inspection rules applicable to that form.

Solicitation of nondeductible contribution. See the instructions for Form 990, Part V, line 6, for rules on public notice of nondeductibility when soliciting nondeductible contributions.

Keeping fundraising records for tax-deductible contribu- tions. A section 501(c) organization that is eligible to receive tax-deductible contributions under section 170(c) must keep sample copies of its fundraising materials, such as:

• Dues statements,

• Fundraising solicitations,

• Tickets,

• Receipts, or

• Other evidence of payments received in connection with fundraising activities.

IF... THEN...

the organization advertises its fundraising events

the organization uses radio, television, or Internet to solicit contributions

the organization uses outside fundraisers

it must keep samples of the advertising copy.

it must keep samples of scripts, transcripts, printouts of emails and web pages, or other evidence of solicitations in such media.

it must keep samples of the fundraising materials used by the outside fundraisers.

For each fundraising event, the organization must keep records to show the portion of any payment received from patrons that isn’t deductible; that is, the retail value of the goods or services received by the patrons. See Disclosure Statement for Quid Pro Quo Contributions , later.

Noncash Contributions

Form 990 schedules. An organization may be required to file Schedule M (Form 990), Noncash Contributions, to report certain noncash (property) contributions; see the Instructions for Schedule M (Form 990) on who must file. Also, an organization that files Schedule B (Form 990) must report certain information on noncash contributions.

Dispositions of donated property. If an organization receives a charitable contribution of property and within 3 years sells, exchanges, or otherwise disposes of the property, the organization may need to file Form 8282, Donee Information Return. See Form 990, Part V, lines 7c and 7d.

Donated property over $5,000. If the organization received from a donor a partially completed Form 8283, Noncash Charitable Contributions, the donee organization should generally complete Form 8283 and return it so the donor can get a charitable contribution deduction. The organization should keep a copy for its records. See Form 8283 for more details.

42 2025 Instructions for Form 990-EZ

Donated Intellectual Property. See Form 990, Part V, line 7g. The organization must file Form 8899 for any tax year that includes any part of the 10-year period beginning on the date of contribution but not for any tax years in which the legal life of the qualified intellectual property has expired or the property failed to produce net income.

A donee organization reports all income from donated qualified intellectual property as income other than contributions (for example, royalty income from a patent). A donee isn’t required to report as contributions on Form 990 (including schedules) any of the additional deductions claimed by donors under section 170(m)(1). See Pub. 526.

Motor vehicles, boats, and airplanes. Special rules apply to charitable contributions of motor vehicles, boats, or airplanes with a claimed value of more than $500. See Form 990, Part V, line 7h; section 170(f)(12); Pub. 4302, A Charity’s Guide to Vehicle Donation; and the Instructions for Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes.

Substantiation and Disclosure Requirements for Charitable Contributions

Recordkeeping for cash, check, or other monetary charitable gifts. To deduct a contribution of a cash, check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. See section 170(f)(17) and Regulations section 1.170A-15 for more information. In the case of a text message contribution, the donor's phone bill meets the section 170(f)(17) recordkeeping requirement of a reliable written record if it shows the name of the donee organization and the date and amount of contribution.

Acknowledgment to substantiate charitable contributions. A donee organization should be aware that a donor of a charitable contribution of $250 or more (including a contribution of unreimbursed expenses) can’t take an income tax deduction unless the donor obtains the organization’s acknowledgment to substantiate the charitable contribution. See section 170(f)(8) and Regulations section 1.170A-13(f). A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor’s instructions or otherwise) distributes the amount received to one or more charities. The organization's acknowledgment must:

1. Be written;

2. Be contemporaneous;

3. State the amount of any cash it received;

4. State:

a. Whether the organization gave the donor any intangible

religious benefits (no valuation needed), and

b. Whether the organization gave the donor any goods or

services in return for the donor’s contribution (a quid pro quo contribution); and

5. Describe goods or services the organization:

a. Received (no valuation needed), and

b. Gave (good faith estimate of value needed).

If the organization accepts a contribution in the name of one of its activities or programs, then indicate the organization’s name in the acknowledgment as well as the program's name. For example: “Thank you for your contribution of $300 to (organization’s name) made in the name of our Special Relief Fund program. No goods or services were provided in exchange for your contribution.”

Similarly, if a domestic organization owns and controls a domestic disregarded entity, and the disregarded entity receives a contribution, then indicate the organization's name in the acknowledgment as well as the relationship with the disregarded entity. For example: “Thank you for your contribution of $300 to (organization's name) made in the name of (name of disregarded entity), which is treated as a disregarded entity of (organization's name) for federal tax purposes. No goods or services were provided in exchange for your contribution.” See Notice 2012-52, 2012-35 I.R.B. 317.

Exception. The written acknowledgment need not include a good faith estimate of value for goods or services given to the donor if they are the following.

1. Goods or services with insubstantial value.

2. Certain membership benefits.

3. Goods or services described in (1) or (2) given to the employees of a donor organization or the partners of a donor partnership.

4. Intangible religious benefits.

These exceptions are defined next.

Disclosure Statement for Quid Pro Quo Contributions

If the organization receives a quid pro quo contribution of more than $75, the organization must provide a disclosure statement to the donor. See section 6115.

The organization’s disclosure statement must:

1. Be written;

2. Estimate in good faith the value of the organization’s goods or services given in return for the donor’s contribution;

3. Describe, but need not value, certain goods or services given to the donor’s employees or partners; and

Exceptions. No disclosure statement is required if the organization gave only the following.

1. Goods or services with insubstantial value.

2. Certain membership benefits.

3. Goods or services described in (1) or (2) given to the employees of a donor organization or the partners of a donor partnership.

4. Intangible religious benefits.

These exceptions are defined below. See also Regulations sections 1.170A-1, 1.170A-13, and 1.6115-1.

Certain Goods or Services Disregarded for Substantiation and Disclosure Purposes

Goods or services with insubstantial value. Generally, under section 170, the deductible amount of a contribution is determined by taking into account the FMV, not the cost to the charity, of any benefits that the donor received in return.

4. Inform the donor that a charitable contribution deduction is limited as follows:

Donor’s contribution

Less The organization’s money, goods, and services given in return

Equals Donor’s deductible charitable contribution.

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However, the cost to the charity may be used in determining whether the benefits are insubstantial. See below.

Cost basis. If a taxpayer makes a payment of $68 or more to a charity and receives only token items in return, the items have insubstantial value if they:

• Bear the charity’s name or logo, and

• Have an aggregate cost to the charity of $13.60 or less (low-cost article amount of section 513(h)(2)).

FMV basis. If a taxpayer makes a payment to a charitable organization in a fundraising campaign and receives benefits with an FMV of not more than 2% of the amount of the payment, or $136, whichever is less, the benefits received have insubstantial value in determining the taxpayer’s contribution.

Tip: The dollar amounts given above are applicable to tax year 2025 under Revenue Procedure 2024-40. They are adjusted annually for inflation.

When a donee organization provides a donor only with goods or services having insubstantial value under Revenue Procedure 2024–40 (and any successor documents), the contemporaneous written acknowledgment may indicate that no goods or services were provided in exchange for the donor’s payment.

Certain membership benefits. Other goods or services that are disregarded for substantiation and disclosure purposes are annual membership benefits offered to a taxpayer in exchange for a payment of $75 or less per year that consist of the following.

1. Any rights or privileges that the taxpayer can exercise frequently during the membership period, such as:

a. Free or discounted admission to the organization's

facilities or events, and

b. Free or discounted parking.

2. Admission to events that are:

a. Open only to members; and

b. Within the low-cost article limitation, per person.

Example 1. Eli offers a basic membership benefits package for $75. The package gives members the right to buy tickets in advance, free parking, and a gift shop discount of 10%. Eli’s $150 preferred membership benefits package also includes a $20 poster. Both the basic and preferred membership packages are for a 12-month period and include about 50 productions. Eli offers Frankie, a patron of the arts, the preferred membership benefits in return for a payment of $150 or more. Frankie accepts the preferred membership benefits package for $300. Eli’s written acknowledgment satisfies the substantiation requirement if it describes the poster, gives a good faith estimate of its FMV ($20), and disregards the remaining membership benefits.

Example 2. In Example 1, if Frankie received only the basic membership package for its $300 payment, Eli’s acknowledgment need state only that no goods or services were provided.

Example 3. Genesis Theater Group performs four plays. Each play is performed twice. Nonmembers can purchase a ticket for $15. For a $60 membership fee, however, members are offered free admission to any of the performances. Charlie makes a payment of $350 and accepts this membership benefit. Because of the limited number of performances, the membership privilege can’t be exercised frequently. Therefore, Genesis’s acknowledgment must describe the free admission benefit and estimate its value in good faith.

Certain goods or services provided to donor’s employees or partners. Certain goods or services provided to employees of donor organizations or partners of donor partnerships may be disregarded for substantiation and disclosure purposes. Nevertheless, the donee organization's

disclosure statement must describe such goods or services. A good faith estimate of value isn’t needed.

Example. Museum Juniper offers a basic membership benefits package for $40. It includes free admission and a 10% gift shop discount. Corporation Kai makes a $50,000 payment to Juniper and in return, Juniper offers Kai’s employees free admission, a T-shirt with Juniper’s logo that costs Juniper $4.50, and a 25% gift shop discount. Because the free admission is a privilege that can be exercised frequently and is offered in both benefit packages, and the value of the T-shirts is insubstantial, Museum Juniper's disclosure statement need not value or mention the free admission benefit or the T-shirts. However, because the 25% gift shop discount to Kai’s employees differs from the 10% discount offered in the basic membership benefits package, Juniper's disclosure statement must describe the 25% discount but need not estimate its value.

Definitions

Substantiation. It is the responsibility of the donor:

• To value a donation, and

• To obtain an organization's written acknowledgment substantiating the donation.

There is no prescribed format for the organization's written acknowledgment of a donation. Letters, postcards, or computer-generated forms may be acceptable. The acknowledgment must, however, provide sufficient information to substantiate the amount of the deductible contribution. The organization may either:

• Provide separate statements for each contribution of $250 or more, or

• Furnish periodic statements substantiating contributions of $250 or more.

Separate contributions of less than $250 aren’t subject to the requirements of section 170(f)(8), regardless of whether the sum of the contributions made by a taxpayer to a donee organization during a tax year equals $250 or more.

Substantiation of payroll contributions. An organization may substantiate an employee’s contribution by deduction from its payroll by:

• A pay stub, Form W-2, or other document showing a contribution to a donee organization; together with

• A pledge card or other document from the donee organization that shows its name. For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions.

The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution.

Substantiation of matched payments. If a taxpayer’s payment to a donee organization is matched by another payer, and the taxpayer receives goods or services in consideration for its payment and some or all of the matching payment, those goods or services will be treated as provided in consideration for the taxpayer’s payment and not in consideration for the matching payment.

Disclosure statement. An organization must provide a written disclosure statement to donors who make a quid pro quo contribution in excess of $75 (section 6115). This requirement is separate from the written substantiation acknowledgment a donor needs for deductibility purposes. While, in certain

Contemporaneous. A written acknowledgment is contemporaneous if the donor obtains it on or before the earlier of:

• The date the donor files the original return for the tax year in which the contribution was made, or

• The due date (including extensions) for filing the donor’s original return for that year.

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circumstances, an organization may be able to meet both requirements with the same written document, an organization must be careful to satisfy the section 6115 written disclosure statement requirement in a timely manner because of the penalties involved.

time the taxpayer makes the payment to the donee organization, the taxpayer receives, or expects to receive, goods or services in exchange for that payment.

Quid pro quo contribution. A “quid pro quo contribution” is a payment that is made both as a contribution and as a payment for goods or services provided by the donee organization.

Example. A donor gives a charity $100 in consideration for a concert ticket valued at $40 (a quid pro quo contribution). In this example, $60 would be deductible. Because the donor’s payment exceeds $75, the organization must furnish a disclosure statement even though the taxpayer’s deductible amount doesn’t exceed $75. Separate payments of $75 or less made at different times of the year for separate fundraising events won’t be aggregated for purposes of the $75 threshold.

Goods or services a donee organization provides in consideration for a payment by a taxpayer include goods or services provided in a year other than the year in which the donor makes the payment to the donee organization.

Penalties. A charity that knowingly provides a false substantiation acknowledgment to a donor may be subject to the penalties under section 6701 and/or section 7206(2) for aiding and abetting an understatement of tax liability.

Charities that fail to provide the required disclosure statement for a quid pro quo contribution of more than $75 will incur a penalty of $10 per contribution, not to exceed $5,000 per fundraising event or mailing. The charity may avoid the penalty if it can show that the failure was due to reasonable cause (section 6714).