Changes in Form 990 for Tax Year 2012

Changes to Form 990 instructions and schedules clarify and modify how organizations report information and income. You can see the full list of changes on the IRS Web site. But here are a few of the highlights that may have an impact on your preparation of information before you begin filling in the form:


–          Remember that you don’t want to include any social security numbers on the Form, because both you and the IRS are required to share the Form 990 with inquirers about your organization.

–          Reporting average hours per week worked for related organizations in addition to hours worked for your organization is required for officers, directors, trustees, key employees, highly compensated employees, and independent contractors.

–          Insurance providers are not considered independent contractors.

–          You no longer need to use a Schedule K-1 to report your share of revenue of joint ventures and other partnerships. You can simply report the information according to your books and records.

–          If you have an outstanding receivable on a loan to an interested person, you must complete Schedule L, Part II.

–          Under reconciliation of Net Assets (Part XI), you need to provide net unrealized gains/losses on investments, donated services for use of facilities, investment expenses, and prior period adjustments. This is now applicable to all nonprofit organizations, not just those exempt under 501(c)(3).

–          The revised definition of ‘professional fundraising services’ includes preparation of applications for grants or other assistance.

–          When acknowledging a donor for a contribution to a specific one of your programs, you must include the organization name. For example:  “Thank you for your contribution of $300 to Good Deeds Organization made in the name of our Special Relief Fund program. No goods or services were provided in exchange for your contribution.”

–          Even if you did not receive non-cash property during the year, the pledge of such property must be reported by checking the “noncash” box on Schedule B, Part I, and completing Schedule B, Part II.  Note that Schedule B should always be completed using the same accounting method the organization uses to complete the main Form 990.


Please comment and let me know if you think other parts of the 2012 Form 990 need clarifying and I’ll answer your question.