What are the benefits that must be reported while filing Form 990?
25 views | Last modified 4/8/2024 5:59:34 AM EST |

Applicable To
990-PF 990-N 990-EZ 990 8868 1120-POL

Benefits are generally non-wage compensation provided by organizations for employees in addition to their normal wages or salaries.

However, while filing Form 990, an organization that is exempt under section 501(c)(8), 501(c)(9), or 501(c)(17) must report the insurance benefits paid to their employees and organizations under section 501(c)(12) must report patronage dividends paid to the members of the organization.

Reporting Benefits paid to members with Tax 990’s Interview-Based Filing Style

  1. Log into your Tax 990 account.
  2. On the dashboard, click on the "Start Return" button
  3. Select the "Tax Year" and "Form 990" option on the list of Federal Returns
  4. Enter your organization details and click "Next."
  5. On the "Organization Tax Year" page, select the calendar or fiscal tax year you want to file the information return. Once done, the subsequent steps will be to fill the actual parts of the form.
  6. Under the Expenses section, click "Start" in Benefits Paid
  7. Select "Yes" and click the “Add Benefits Paid” button to report the benefits paid to the organization members
  8. Click “Next” and follow the subsequent steps as prompted
  9. Review the details, pay, and click the “Transmit” button to transmit your return to the IRS

Reporting Benefits paid to members with Tax 990’s Form-based Filing Style

To report the benefits paid to members with Tax 990 using the form-based filing style, go to Part I, Line 14 of the Expenses section. Here, enter the value of benefits paid to or for members by your organization for the prior tax year in the prior year field box.

Next, click on the (Part IX, column (A), line 4) link, and you will be directed to Part IX, Statement of Functional Expenses. If your organization comes under Section 501(c)(3) and 501(c)(4), then it must complete all columns. If not, complete only column (A) of Part IX.

In line 4, Column (A), Total expenses, enter the value of benefits paid to or for members. The value you enter will automatically get pre-filled in Part I, line 14, Current Year field box. These are the benefits paid by your organization for the current tax year.

NOTE- Do not include the cost of employment-related benefits such as health insurance, life insurance, or disability insurance provided by the organization to its officers, directors, trustees, key employees, and other employees under this section.

To know how to report benefits paid while filing Form 990-EZ, click here.

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