Understanding Form 990 Schedule B — Key Insights for Nonprofits

Schedule B, also known as Schedule of Contributors, is typically used to provide supplementary information on contributions received

Form 990 Schedule B

Dealing with nonprofit tax filing obligations might be challenging. However, it’s inevitable for any organization that wants to obtain/maintain tax-exempt status and maintain public integrity.

To file Form 990 precisely, the nonprofits must adhere to numerous requirements set forth by the IRS. One such requirement is to include applicable schedules with the 990 returns in order to provide supplementary information required by the IRS. With 16 different types of 990 schedules available, understanding each schedule is vital for nonprofits to accurately report their financial activities and maintain compliance with the IRS.

In this blog, we’ll delve into one of the most commonly used types of schedule — Schedule B, its purpose, requirements, and more.

990 Schedule B — Purpose and Significance

Schedule B is typically known as “Schedule Of Contributors. As the name indicates, Schedule B is a supplementary form that reports a detailed breakdown of a tax-exempt organization’s contributions acquired during the corresponding tax year.

This schedule shall be used along with the major 990 forms, such as **990-EZ, 990, and 990-PF, **if the filing organization meets the criteria specified by the IRS.

Who can Use 990 Schedule B?

Generally, nonprofits are required to include Form 990 Schedule B with their 990 return if they fall under any of the following categories.

General Rule:

Under General Rule, organizations that are required to e-file Form 990-PF, 990-EZ, or 990-PF and have received contributions of $5,000 or more from a single contributor during the tax year should complete Part I and Part II of Schedule B.

Special Rule:

• Section 501(c)(3) organizations that meet the 33 ⅓ % support test and are required to e-file Form 990 or 990-EZ and have received $5000 or 2% of the total contributions (whichever is greater) from any one contributor should also complete Part I and Part II of Schedule B.
• Section 501(c)(7), (8), or (10) organizations, required to file Form 990 or 990-EZ and have received contributions of more than $1,000 from any contributors specifically for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.
• Section 501(c)(7), (8), or (10) organizations that are required to e-file Form 990-EZ or 990 and have received contributions of less than $1,000 from any contributors specifically for religious, charitable, and similar purposes should only enter the amount and complete the parts only upon meeting the general rule.

Information Required to Complete Schedule B

Generally, a nonprofit that is required to complete Schedule B will need to report the following details.

Information about Contributors

The organization must provide the complete details of all the contributors who contributed $5000 or more. This includes,

• Name and Contact Address
• Overall Contributions made
• Type of Contribution

Contributors may be individuals, fiduciaries, partnerships, corporations, associations, trusts, exempt organizations, or governmental units, and Contributions may be grants, bequests, devices, and gifts of money or property to the organization. Also, the cash contributions may include contributions paid by cash, credit card, check, money order, electronic fund or wire transfer, and other charges against funds on deposit at a financial institution.

Organizations other than Section 501(c)(3) organizations (including Section 4947(a)(1) nonexempt charitable trusts and nonexempt private foundations described in Section 6033(d)) and Section 527 political organizations are not needed to report the names and addresses of the contributors and can fill out “N/A” instead.

Information about Noncash Property

Noncash property refers to the contributions received by the organization in any form other than cash during the tax year. This includes contributions such as stocks, securities, real estate, and other properties.

The organizations are required to enter information such as,

• Detail of the property
• Property’s Fair Market Value (FMV)
• Date when the property was received

Information about Exclusive Contributions

The information of the contributions made exclusively for religious, charitable, and other related purposes to organizations described in section 501(c)(7), (8), or (10) that total more than $1,000 for the year from any one contributor. The details must include,

• Purpose of gift
• Use of gift
• Description of how the gift is held
• Information about the transfer of gift to another organization

Type of Contributions to be Reported

Below are the types of contributions that can be reported.

1. Contributions received from various fundraising events and activities, such as dinners, merchandise door-to-door sales, carnivals, and bingo games.

2. Contributions received in the form of membership dues and grants.

3. Contributions received from governmental units.

4. Contributions made indirectly by the public through solicitation campaigns of federated fundraising agencies.

5. Contributions received from associated organizations, including the parent, subordinate, or any other organization with the same parent as the filing organization.

6. Contributions received from commercial co-ventures. This type of contribution is typically received by allowing donors or individuals to use the organization’s name in a sales promotion campaign, where the outside organization agrees to contribute a percentage (generally 2%) of all sales proceeds to the filing organization.

Conclusion

In order to maintain tax-exempt status, nonprofits need to make sure their 990 returns are accurate and aligned with the IRS guidelines. Noncompliance with the Schedule B filing requirements may lead to serious consequences such as penalties and revocation of tax-exempt status.

With Tax990, nonprofits can save their money and time in filing 990 schedules! Tax990 is an IRS-authorized software trusted by many nonprofits that includes Schedule B and other required schedules for free, along with the 990 form. It also delivers comprehensive support, user-friendly navigation, and guidance for nonprofits to streamline the 990 filing process.