Form 990-EZ: eligibility test and review checks for small exempt organizations

“Form 990-EZ can be filed by organizations with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of their tax year.” IRS, Instructions for Form 990-EZ (2025)

Who can file Form 990-EZ?

An exempt organization can file Form 990-EZ for 2025 if its gross receipts are less than $200,000 and its total assets at the end of the tax year are less than $500,000, according to the 2025 Instructions for Form 990-EZ. Crossing either test means filing Form 990. Several organizations can't use Form 990-EZ at any size:

• Sponsoring organizations of donor advised funds
• Organizations that operated one or more hospital facilities
• Section 501(c)(29) nonprofit health insurance issuers
• Section 512(b)(13) controlling organizations with certain transfers to a controlled entity
• Section 501(c)(21) black lung trusts, unless they qualify for Form 990-N
• Central organizations filing a group return

A private foundation files Form 990-PF, never Form 990-EZ. A public charity under section 170(b)(1)(A)(iv) or (vi) or 509(a)(2) past its first 5 years completes the public support test on Schedule A first, because failing it means filing Form 990-PF instead.

An organization whose gross receipts are normally $50,000 or less can submit Form 990-N instead, or file Form 990-EZ voluntarily, in which case the return must be complete. Form 990-EZ is due by the 15th day of the 5th month after year end, which is May 15 for a calendar-year filer.

How are gross receipts figured for the Form 990-EZ test?

Gross receipts for the Form 990-EZ test are total revenue on line 9 plus the costs netted against revenue on lines 5b, 6c and 7b, per line L of the form and Appendix B of the 2025 instructions. Gross receipts are the total amounts received from all sources without subtracting costs or expenses, so the costs taken off asset sales, fundraising events, gaming and inventory sales have to be added back.

1. Start with total revenue on line 9
2. Add the cost or other basis and sales expenses of assets sold on line 5b
3. Add direct expenses of gaming and fundraising events on line 6c
4. Add cost of goods sold on line 7b
5. Compare the result with $200,000

Total assets are tested separately using Part II, line 25, column (B), the end-of-year balance sheet amount without any reduction for liabilities. The instructions for line 25 say that if column (B) is $500,000 or more, the organization files Form 990.

The "normally" averaging test applies only to Form 990-N. For an organization at least 3 years old, gross receipts are normally $50,000 or less if they averaged $50,000 or less over the 3 years ending with the current year. The Form 990-EZ test uses the current year's gross receipts alone.

Where does each source document go on Form 990-EZ?

Each source record an exempt organization keeps has a specific line on Form 990-EZ. Part I covers revenue, expenses and changes in net assets, Part II is the balance sheet, Part III describes program accomplishments, Part IV lists officers, directors, trustees and key employees, Part V asks compliance questions, and Part VI applies to section 501(c)(3) organizations only.

Fundraising event receipts above the fair market value of what attendees received are contributions, reported on line 1 and noted in the parentheses on line 6b. Schedule G is required when gaming income on line 6a is more than $15,000, or when fundraising event income and contributions together are more than $15,000. Section 501(c)(3) organizations attach Schedule A, and grants paid on line 10 are listed on Schedule O.

What does a Form 990-EZ eligibility check look like?

For example, a section 501(c)(3) arts organization has $120,000 of contributions, $30,000 of program fees and $2,000 of investment income for 2025. It sold equipment for $40,000 with a $38,000 basis, ran a gala with $25,000 of gross income and $10,000 of direct expenses, and sold $8,000 of merchandise costing $5,000. Total assets at year end are $310,000.

Total revenue is $172,000, but gross receipts are $225,000, which is over the $200,000 limit. The organization has to file Form 990 for 2025 even though its total assets of $310,000 are well under $500,000. The $25,000 of gala income also needs Schedule G, Part II, because it is over $15,000. Without the $40,000 equipment sale, gross receipts would have been $185,000 and Form 990-EZ would have been allowed, so a single asset sale can change which form the organization files.

What do reviewers check on Form 990-EZ?

A reviewer checking Form 990-EZ first confirms the organization is allowed to file it, then ties the balance sheet and net assets to the prior-year return. The prior-year return and the year-end balance sheet are the first documents to pull, because line 19 has to agree with last year's ending net assets. The six checks below come from the 2025 Form 990-EZ and its instructions.

The reviewer also checks that Part VI is complete for a section 501(c)(3) organization, that line 20 changes are explained on Schedule O, and that no social security numbers appear anywhere, since the return is open to public inspection and the IRS can't remove them before release except in limited cases. Part IV lists every officer, director, trustee and key employee even if they weren't paid, with -0- in column (c) when no compensation was reported.