EY has prepared annotated versions of the 2024 Form 990, Return of Organization Exempt from Income Tax, and its schedules and instructions; Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, and instructions; Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation and its schedules and instructions; and Form 990-T, Exempt Organization Business Income Tax Return, and instructions.

These annotated forms, schedules and instructions (attached to this Tax Alert) highlight changes the IRS has made for tax year 2024 and explain some of the more significant differences from the tax year 2023 forms, schedules and instructions. The annotated Form 990 includes a table of contents from which readers can hyperlink to parts of the form, specific schedules and instructions.

There are no substantive changes to Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code or its instructions for the current year.

Changes to the 2024 Form 990, schedules and instructions

The changes to the 2024 Form 990, schedules and instructions consist of minor clarifications and updates. Penalty and dues amounts have been updated to account for inflation, and references to revenue procedures have also been updated to reflect the most recently published revenue procedures. Many of the supplementary schedules to the core form have been revised from annual updates to continuous use products, setting the 2024 versions as the standard until revisions are issued at a future date.

Changes to the 2024 Form-EZ 990 and instructions

Most of the changes to the 2024 Form 990-EZ and instructions are minor clarifications and updates. Penalty and dues amounts have been updated to account for inflation, and references to revenue procedures have also been updated to reflect the most recently published revenue procedures.

Changes to the 2024 Form 990-T, schedules and instructions

There have been some significant changes to the 2024 Form 990-T and instructions, including:

1. Part II line 4a and Part III line 3a: Added for reporting unrelated business taxable income that can (Part II line 4a) and cannot (Part III, line 3a) be reduced by certain nonrefundable tax credits.
2. Instructions, Page 1, What's New: Extension of time to file: Notifies taxpayers that Form 8868 has been updated to allow certain entities filing Form 990-T to make an elective payment election to request an extension of the time to file Form 990-T. All taxpayers that want to request a six-month extension of time to file Form 990-T, regardless of reason, must use Form 8868 to request the extension. The elective payment election must be made on a return filed by the due date (original or extended).
3. Instructions, Page 14, Paid Preparer: Updated to clarify that the paid preparer authorization and signature requirement must include a Preparer Tax Identification Number (PTIN) and that any non-employee paid to prepare the return must sign Form 990-T in Part V.
4. Schedule A Instructions, Page 19, Other Income, Schedule A, Part I, Line 12: Removes reference to the COVID-related payroll tax credit for qualified sick leave, and qualified paid family leave, taken between April 1, 2020, and September 30, 2021.
5. Schedule A Instructions, Page 22, Taxes and License, Schedule A, Part II, Line 6: Removes the description of COVID-related deduction of Social Security and Medicare taxes, as they are no longer reportable as taxes and licenses deductions on line 6.

Changes to the 2024 Form 990-PF, schedules, and instructions

Most of the changes to the 2024 Form 990-PF and instructions are minor clarifications and updates, including:

1. Instructions, Page 7, Accounting period change: Updated to describe accounting period change requirements. Form 990-PF filers are now required to describe the reason for an accounting period change.
2. Instructions, Page 14, Specific Instructions, Item F, 60-Month Termination under Section 507(b)(1)(B): Updated to clarify that private operating foundations that intend to begin the 60-month termination provisions of IRC Sec. 507(b)(1)(B) should no longer send advanced notice by paper to the IRS's Cincinnati location, but rather give notice to TE/GE by e-filing a Form 8940 (as outlined in Reg. Sec. 1.507-2(b)(3)).

Implications

Updates to the 2024 Form 990-series returns, schedules and instructions reflect changes to federal tax law and IRS procedure, clarifications and guidance on how to accurately complete certain sections of the forms and schedules. Tax-exempt organizations should continue to carefully review and adhere to the instructions when completing the forms and schedules, particularly for tax credit reporting and elective filer elections. They should also consult their software providers to confirm electronic filing capability for their Form 990-series returns and the ability to upload and e-file required attachments.

Please contact your Ernst & Young LLP tax professional with any questions.