Dear Scholz Nonprofit Law clients, current and past, and friends in the community:
Thank you for the opportunity to work with you. We greatly appreciate the contributions you make in the community and the trust you place in us to assist you. We look forward to being able to serve you in 2023. May the year ahead be a productive, effective, and fulfilling year for all of you!
With this email, we want to remind our readers that all nonprofits have an obligation to submit various reports to the IRS and to the state each year.
Below is an explanation of these key filings and their deadlines:
1) Form 1099 – You may be required to issue Form 1099-MISC for miscellaneous payments such as rent or Form 1099-NEC for payments to independent contractors. (Until 2021, the Form 1099-MISC captured both rent and payments to independent contractors; starting last year, payments to independent contractors are made on Form 1099-NEC “non-employee compensation.”) Forms 1099-MISC and Forms 1099-NEC for 2022, along with Form 1096, must be submitted to the IRS by January 31, 2023.
- Form 1099-NEC is required for payments totaling $600 or more to independent contractors.
- Form 1099-MISC is required for payments totaling $600 or more for rent, prize awards or for payment to attorneys.
- Employees of your organization should receive a Form W-2 (not a Form 1099) by January 31st.
- This requirement applies only to payments to persons who receive payments individually, through a sole proprietorship, or through a partnership (including an LLC taxed as partnership). It does not apply to payments made to corporations registered as S or C corporations.
- Note: Scholz Nonprofit Law LLC is registered as an S corporation so you do not need to prepare a Form 1099 for us.
Unfortunately, you cannot download Form 1099. You can produce the form through a tax software program or through a service provided by an accountant.
2) Form 990 – All tax-exempt organizations, including 501(c)(3), 501(c)(4) and 501(c)(6) organizations, must file some variation of Form 990 with the IRS. As a reminder, if your organization fails to file Form 990 for three consecutive years, its tax-exempt status will be revoked and your organization will have to reapply for tax-exempt status.
The due date for Form 990 is four months and 15 days after the end of your fiscal year. If your organization’s fiscal year is the calendar year, your organization is required to file some version of the Form 990 by May 15, 2023. If your fiscal year ends on June 30, the due date is November 15.
If your total revenues were $50,000 or less, you may file Form 990-N. Form 990-N, available here, is quick, easy, and requires no financial information, but it is essential for preserving tax-exempt status.
If gross receipts for 2022 are more than $50K but less than $200K (and gross assets are <$500K), your organization may file the Form 990-EZ.
If revenues are over $200K, you must file the full Form 990.
Private foundations must file the Form 990-PF, regardless of revenue totals.
Note for determining $50,000 threshold: Some organizations may still qualify for Form 990-N even though they exceed $50,000 in total revenues in the immediately preceding tax year. These organizations include the following:
- in existence for one year or less and received, or donors pledged to give, $75,000 or less during its first taxable year;
- in existence between one and three years and averaged $60,000 or less in gross receipts during its first two tax years; or
- at least three years old and averaged $50,000 or less in gross receipts for the immediately preceding three tax years (including the year for which calculations are being made).
Electronic filing: All versions of Form 990 must be filed electronically. We suggest you work with a tax software program or an accountant.
3) State Filing – Incorporated Status – All organizations must renew their incorporated status periodically. In Wisconsin, DFI annual corporate reports are due at the end of the quarter in which the organization was incorporated. See here for more information.
4) State Filing – Charitable Organization that solicits donations – In Wisconsin, organizations that solicit contributions of more than $25,000 or pay an employee are required to register. After registration, the charitable organization credential must be renewed annually on the DFI website. The renewal is due by July 31 each year. In addition, the charitable organization must submit an annual financial report within 12 months after the organization’s fiscal year-end. See here for more information.