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IRS Updates, January 2011: New Form 990-N Threshold, Free Health Care Tax Credit Webinar, and More

The IRS reminds smaller nonprofits that a higher filing threshold has gone into effect for Form 990-N; invites smaller businesses, including nonprofits, to attend a free webinar on the Small Business Health Care Tax Credit; has published new fees for exempt organizations for 2011; and has released instructions and withholding tables related to the payroll tax cut.

New Form 990-N Filing Threshold

The filing threshold for Form 990-N, also known as the ePostcard, has been raised for returns covering the 2010 tax year that are filed in 2011. Most exempt organizations with gross annual receipts of $50,000 or less may now file Form 990-N instead of Form 990-EZ or 990. Private foundations, however, must continue file Form 990-PF, regardless of organization size.

Learn more

Free IRS Webinar

On February 2, 2011, the IRS will present a free webinar on the Small Business Health Care Tax Credit. The webinar will cover:

  • Amount of credit
  • Who qualifies
  • Eligibility rules
  • Figuring the content
  • How to claim the credit
  • Resources available

Learn more or register

EO Fees

New fees for exempt organizations went into effect January 3, 2011. The fees generally apply to requests for letter rulings, opinion letters, determination letters, and advisory letters submitted by or on behalf of taxpayers or other entities.

Learn more

Payroll Tax Cut and Withholding

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduces taxpayers' Social Security tax withholding rate for 2011. The law also continues the lower federal income tax rates that have been in effect in recent years.

The IRS has published new tables for employers to use when implementing the changes, and additional guidance will be forthcoming. The IRS asks employers to adjust payroll systems as soon as possible but not later than January 31, 2011. Social Security tax that is overwithheld this month should be returned to employees as soon as possible but not later than March 31, 2011.

Learn more

No News on Revocations

We've received requests for updates about the automatic revocations of tax-exempt status that will go into effect sometime this year. At this time, there are no developments to report. The IRS has not yet released the list of affected organizations, nor has any new guidance been issued. We'll let you know as soon as we hear something.

Learn more about this issue

Suzanne E. Coffman, January 2011
© 2011, GuideStar USA, Inc.

Suzanne Coffman is GuideStar’s editorial director and editor of the GuideStar Newsletter.

Topics: Policy