Nonprofits without income or expense and Form 990-N

Many nonprofit leaders ask the same question each year: If our organization had no income or expenses, do we still have to file Form 990-N? The short answer is yes. Even if your nonprofit had zero financial activity, the IRS still requires most tax-exempt organizations to file an annual return or notice.

Filing may seem unnecessary when there’s nothing to report, but this simple step keeps your nonprofit in compliance, protects its tax-exempt status and helps maintain public trust.

What is Form 990-N?

Form 990-N, commonly called the e-Postcard, is the electronic annual notice that small tax-exempt organizations must file with the IRS. It was created to simplify reporting for nonprofits whose gross receipts normally total $50,000 or less. The form must be filed electronically; paper submissions are not accepted.

Gross receipts are defined as the total amounts the organization received from all sources during its annual accounting period, without subtracting any cost or expenses. 

Unlike the longer Form 990 or Form 990-EZ, the e-Postcard doesn’t ask for financial statements or program details. It simply provides basic identifying information about your organization, including its name, EIN, mailing address, the name and address of a principal officer and confirmation that annual gross receipts are $50,000 or less.

Why you must file even without activity

The IRS requires every tax-exempt organization to file a return or notice each year, even if it had no income or expenses. Filing tells the IRS that your organization is still active and operating within the rules for tax exemption. It’s a quick and simple way to confirm that your nonprofit still exists and is maintaining compliance.

For example, if your organization received its exempt status but hasn’t begun fundraising, you still must file. Reporting “no activity” lets the IRS know that you didn’t exceed the filing threshold and are still in good standing.

Who must file Form 990-N

Organizations recognized as tax-exempt under Internal Revenue Code Section 501(c) must file an annual return or notice. The type of return depends on the size of the organization:

• Gross receipts normally $50,000 or less: File Form 990-N (e-Postcard)
• Gross receipts under $200,000 and total assets under $500,000: File Form 990-EZ
• Gross receipts $200,000 or more or total assets $500,000 or more: File Form 990  

Form 990-N can only be used by organizations that meet the $50,000 gross receipts threshold and are eligible to file it.

Organizations that cannot file Form 990-N

Some tax-exempt organizations are not eligible to file Form 990-N, even if their income is below $50,000. These include:

• Private foundations (which must file Form 990-PF)
• Supporting organizations described in Section 509(a)(3)
• Section 527 political organizations
• Churches, certain church-affiliated organizations and government entities that are exempt from filing requirements
• If your nonprofit fits any of these categories, use the appropriate return instead.

What happens if your organization has non-business income?

Suppose an exempt organization has gross income of $1,000 or more from a business regularly carried on that is not substantially related to its exempt mission. In that case, the organization must generally file Form 990-T and pay tax on the net income from that unrelated business. In addition to unrelated business income tax (UBIT), Form 990-T, Exempt Organization Business Income Tax Return, may also apply when a trust or other entity must report proxy tax under §6033(e). 

When and how to file

Form 990-N must be filed electronically through the IRS filing system. It is due on the 15th day of the fifth month after the close of your tax year. For calendar-year organizations, the due date is May 15.

You will need:

• Your organization’s EIN (employer identification number)
• The tax year being reported
• Legal name and mailing address
• Any other names used by your organization
• The name and address of a principal officer
• A statement confirming gross receipts are normally $50,000 or less

After filing, you’ll receive a confirmation email once the IRS accepts your e-Postcard. This confirmation serves as proof of compliance, so keep it with your records.

What happens if you don’t file

If an organization fails to file for three consecutive years, its tax-exempt status is automatically revoked by law. However, there is no penalty for late filing of Form 990-N, but the IRS will send a reminder notice if the filing is late. This applies regardless of financial activity. Once revoked, your organization becomes taxable and must reapply for exemption using Form 1023 or Form 1023-EZ. The IRS maintains a public list of revoked organizations. Reinstatement is possible, but it is time-consuming, so staying current is far easier than trying to regain compliance.

Losing your exemption can also impact funding. Donors may not be able to claim deductions for contributions made while your status is revoked, and many grant-makers will not fund unverified organizations.

Why it matters

Even with no income or expenses, your nonprofit still has filing obligations. Completing Form 990-N is more than a formality, it protects your organization’s status and credibility. Timely filing helps maintain eligibility for donations, grants and public recognition as a compliant nonprofit.