Schedule A (Form 990) is used by an organization that files Form 990, Return of Organization Exempt From Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, to provide the required information about public charity status and public support. Information provided on this Form will become available for the public to access and ensure the Organization's volunteers, members, contributors, and potential board members. And there is a standard to qualify as a public charity. Let's have a look about the Schedule A in detail.
Who Needs to File Schedule A with Form 990/990EZ?
An organization that answered “Yes” to Form 990, Part IV, line 1, must complete and attach Schedule A (Form 990) to Form 990. Any section 501(c)(3) organization (or organization treated as such) that files a Form 990-EZ must complete and attach this schedule to Form 990-EZ. These include:
- Organizations that are described in section 501(c)(3) and are public charities;
- Organizations that are described in sections 501(e), 501(f), 501(j), 501(k), or 501(n); and
- Nonexempt charitable trusts described in section 4947(a)(1) that aren’t treated as private foundations.
Qualifying for Public Charity Status
Generally, organizations that are classified as public charities are those that:
- are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges, and universities,
- have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities,
- receive income from the conduct of activities in furtherance of the organization’s exempt purposes, or
- actively function in a supporting relationship to one or more existing public charities.
Public Support Test
You need to meet the public support to qualify as a public charity.
One-third Test for 509(a)(1): The total support from government agencies, general public contributions, and the contributions or grants from other public charities must exceed 331/3%.
To calculate an organization's public support percentage
Public Support / Total Support = Public Support %
* Total Support - Gifts and Grants, Membership Fees, Unrelated Business Income, Gross Investment Income, Governmental Services
Facts and Circumstances Test: 10% or more of its total support must come from government agencies, general public contributions, and contributions or grants from other public charities and also the facts and circumstances must indicate that it is a publicly supported organization.
If your organization matches these percentages for the prior year and even If the organization’s first, second, third, fourth, or fifth tax year as a section 501(c)(3). Then your Organization is qualified for the Public charity Status.
The “One Third/One Third” Test - Section 509(a)(2)
If you pass this requirement you need to attach the Schedule A with 990/990-EZ.
Under this test, the organization determines by:
- Percentage of public support, which must exceed 33 1/3 % of total support; and
- Organizations that are described under sections 501(e), 501(f), 501(j), 501(k), or 501(n);
- Percentage of investment income, which may not exceed 33 1/3 percent of the total.
Public Support / Total Support = ⅓ or greater
Investment Income / Total Support = Less than ⅓
What if an Organization Fails the Public Support Tests?
If you do not pass the Public Support test, your Organization will be considered as Private Foundations and you need to file 990-PF.
Filing Schedule A with your Form 990/990-EZ
When E-Filing Form 990 or 990-EZ with IRS 990, you can attach Schedule A for free. Schedule A will be auto-generated based on the information you provide on your 990 return.
Filers can also take advantage of the multi-user access feature and invite board members to review and approve their returns. Once reviewed and approved, the Form 990/990-EZ can be securely e-filed to the IRS. Also, our live customer support team is available to assist you during your filing process and answer any questions you may have.
If your return is rejected by the IRS, you can easily make corrections on it and retransmit it to the IRS for FREE.