2020 Instructions for Form 990-T - IRS tax forms

1 2020 Department of the Treasury Internal Revenue Service Instructions for form 990-T . Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e)). Section references are to the Internal Revenue Code unless otherwise noted. What's New Contents Page Mandatory electronic filing. Mandatory electronic filing of the 2020 form 990-T started in February 2021. Limited exceptions Purpose of form .. 2. apply. See When, Where, and How To File, later, for more Who Must File .. 2 information. When, Where, and How to File .. 3 Updated format.

2 form 990-T has been redesigned for tax year Depository Method of Tax Payment .. 4 2020. Each unrelated trade or business of an organization has a Other forms That May Be Required .. 4 separate Schedule A attached to the return, with a list of how Accounting Methods .. 6 many Schedules A are attached. Each separate trade or business may be classified by a 2-digit North American Industry Specific Instructions .. 8 Classification System (NAICS) code. See Regulation section Items A through L .. 8 (a)-6(b)(1)), regarding use of 2-digit NAICS codes. Part I.

3 Total Unrelated Business Taxable Income .. 9 Different rules apply for investment income. Part II. Tax Computation .. 9 In the Instructions , the Definitions section has been moved to Appendix A. Part III. Tax and Payments .. 10. Part IV. Statements Regarding Certain Activities New payroll credit for required paid sick leave or family and Other Information .. 12 leave. Under the Families First Coronavirus Response Act (FFCRA), as amended, an eligible employer can take a credit Part V. Supplemental Information .. 13 against payroll taxes owed for amounts paid for qualified sick General Instructions Schedule A ( form 990-T ).

4 13 leave or family leave if incurred during the allowed period. Purpose of the Schedule .. 13 However, there is no double benefit allowed. The portion (if any). of the tax credits that is allocable to an unrelated trade or Specific Instructions Schedule A ( form 990-T ) .. 15. business must be included in gross income from that unrelated Part I. Unrelated Trade or Business Income .. 15 trade or business for purposes of the tax imposed by section 511. Part II. Deductions Not Taken Elsewhere .. 18 and the allocable amounts claimed are reportable as income on Part III.

5 Cost of Goods Sold .. 21 line 12 (Other income) of the appropriate Schedules(s) A ( form 990-T ). Go to and search "Special Issues for Part IV. Rent Income .. 22 Employers: Taxation and Deductibility of Tax Credits" for more Part V. Unrelated Debt-Financed Income .. 23 information. Part VI. Interest, Annuities, Royalties, and Rents New employee retention credit. The Coronavirus Aid, Relief, From Controlled Organizations .. 24 and Economic Securities Act (CARES Act) allows a new Part VII. Investment Income of a Section 501(c)(7), employee retention credit for qualified wages.

6 Any qualified (9), or (17) Organization .. 25 wages for which an eligible employer claims against payroll Part VIII. Exploited Exempt Activity Income, Other taxes for the new employee retention credit may not be taken Than Advertising Income .. 26 into account for purposes of determining other credits. Part IX. Advertising Income .. 26 Temporary allowance of 100% for business meals. An organization is allowed a 100% deduction for certain business Part X. Compensation of Officers, Directors, and meal expenses paid or incurred in 2021 and 2022. See Travel, Trustees.

7 26 meals, and entertainment, later. Part XI. Supplemental Information .. 26. Business Activity Codes .. 28 Reminders Appendix A. Definitions .. 29 Separate UBTI calculation for each trade or business. Appendix B. Charitable Contribution Deduction .. 30 Organizations with more than one unrelated trade or business Appendix C. Public Inspection of form 990-T must compute unrelated business taxable income (UBTI), Returns Filed by Section 501(c)(3) including for purposes of determining any net operating loss deduction, separately with respect to each trade or business.

8 Organizations .. 31. See Schedule A ( form 990-T ). The UBTI with respect to any Index .. 34 such trade or business shall not be less than zero when computing total UBTI. Future Developments Net operating loss (NOL) carryback. The CARES Act For the latest information about developments related to form amended section 172 provides for carryback of any net 990-T and its Instructions , such as legislation enacted after they operating loss arising in a tax year beginning after 2017 and were published, go to before 2021 to each of the 5 tax years preceding the tax year of the NOL.

9 Taxpayers may elect to waive the carryback period for NOLs arising in those years. To elect to waive the carryback Feb 26, 2021 Cat. No. 11292U. period for an NOL arising in a tax year beginning in 2018 or The gross receipts from a gaming business include all 2019, attach a statement electing the carryback waiver to your ! amounts wagered in games, not just the net proceeds return for the first tax year ending after March 27, 2020. For more CAUTION after payment of prizes and other expenses. Cash prizes information see Rev. Proc. 2020-24. If you incurred an NOL in a aren't included in cost of goods sold but are reported on tax year beginning in 2018 or 2019, you can file an amended Schedule A, Part II, Line 14 as other deductions.

10 Return, form 990-T , to carryback the NOL. See Pub. 536 for more information. A disregarded entity, as described in Regulations Carrybacks of net operating losses for unrelated trade or ! sections through , is treated as a CAUTION branch or division of its parent organization for federal businesses was prohibited, but that provision was delayed by the CARES Act. The same is true of a percentage limitation on tax purposes. Therefore, financial information applicable to a the use of losses. disregarded entity must be reported as the parent organization's financial information.