Fillable Form 990-W

What is Form 990-W?

Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations, is a form used by tax-exempt organizations to calculate their organization’s estimated tax liability from unrelated businesses they conduct.

Tax-exempt organizations still need to report their activities to the IRS. This is done through fulfilling Form 990, Return of Organization Exempt from Income Tax. However, tax-exempt organizations may sometimes have activities that are not part of their usual tax-exempt businesses, and therefore will need to fill out the 990-W form in order to declare their income from said activities.

Examples of tax-exempt organizations are:

• Charitable Organizations
• Churches and Religious Organizations
• Private Foundations
• Political Organizations
• Other Nonprofits

Of these examples, Religious Organizations (most specifically Churches) can be exempt from taxes provided that they fulfill the 5 criteria listed in Section 501 (C) (3) of the Internal Revenue Code (IRC), and do not have to file Form 990. However, should they have income from unrelated businesses (essentially such businesses or activities that are not tied to their function as a religious organization), then, they must still file Form 990-W in order to declare their Unrelated Business Income Taxes (UBIT).

Tax-exempt organizations filing Form 990-W must also pay their UBIT in installments to be paid on the 15th day of the 4th, 6th, 9th, and 12th months of the year.

Who needs to use Form 990-W?

IRS Form 990-W must be filled out by tax-exempt organizations that have income from unrelated businesses that reaches or exceeds $1000.

The requirements for considering a business as “unrelated” are as follows:

1. It is a trade or business.
2. It is regularly carried on.
3. It is not substantially related to furthering the exempt purpose (i.e. Charity, Religious Service) of the organization.

Further information can be found in the instructions section of Form 990-W.

How to fill out Form 990-W?

Form 990-W along with the included Schedule A is a fairly lengthy form, but ultimately a simple one to fill out despite its length.

It will help greatly to have information on the unrelated business your organization conducted and how much it earned, as well as information on your own organization.

Several parts of the form reference the “Instructions”, which begin on page 4 of the form. Make sure to consult the instructions for the relevant lines in order to properly fill out the form according to the requirements of the IRS.

Form 990-W

Line 1

Enter your Unrelated Business Taxable Income (the total income you received from your unrelated business) here.

Line 2

Enter 21% of Line 1 (multiply Line 1 by 0.21). Check the instructions for further details on how to apply tax to Trusts, if applicable.

Line 3

Enter here the alternative minimum tax for trusts. The alternative minimum tax is usually the excess of tentative minimum tax over the regular tax. Check Schedule 1 (Form 1041) for more details.

Line 4

Add Lines 2 and 3 and enter the total here.

Line 5

Enter your estimated tax credits here. These include the sum of any credits allowable against your UBIT. See Form 990-T and its instructions for information on which credits are considered “allowable”.

Line 6

Subtract Line 5 from Line 4 and enter the difference here.

Line 7

Enter the base erosion tax and the sum of any recaptured tax credits here. Consult Form 990-T’s instructions for information on what credits you may take.

Line 8

Add Lines 7 and 6 and enter the sum here.

Line 9

If your organization is also qualified to take credit for tax paid on fuels, fulfill Form 4136 and enter that credit amount here.

Line 10

a. Subtract Line 9 from Line 8, and enter the difference here. If the difference is less than 500, then you do not need to make any estimated tax payments. For Private Organizations, please consult the Instructions for more details.

b. Enter the tax shown on the previous tax year’s return. If this amount is zero or if the tax year is less than 12 months, skip this line and enter the amount from 10a on 10c.

c. Enter the smaller of 10a or 10b. If you were required to skip 10b, then enter the amount from 10a here.

Line 11

Enter in each field the due dates for the payment installments you will be making. Check the instructions for more details on how to format the dates. Note that if a due date falls on a Saturday, Sunday or legal holiday, the due date will be the next business day.

Line 12

Enter 25% (0.25) of Line 10c on the columns provided. If your organization uses the annualized income installment method, the adjusted seasonal installment method, or is considered a “Large Organization”, then refer to the instructions for details on how to properly fill out this section.

Line 13

Enter here any Overpayment made in the previous tax year that your organization wishes to credit against its tax for this year. The Overpayment is credited against any unpaid, required installments in the order in which the installments are required to be paid.

Line 14

Subtract Line 13 from Line 12 and enter the differences in the columns here.

Schedule A - Required Installments Using the Annualized Income Installment Method and/or the Adjusted Seasonal Installment Method Under Section 6655(e)

An organization that expects its unrelated business income to vary throughout the year may want to complete Schedule A in order to determine whether or not it can lower the amount of one or more required installments. If you are only using the Annualized Income Installment Method, complete Parts I and III. If you are using only the Adjusted Seasonal Installment Method, complete Parts II and III. If you are using both, complete all three parts.

Make sure to complete each column in the parts applicable to you before moving on to the next unless otherwise indicated. For example, if you are only filling out Parts I and III, complete column (a) for Lines 1 through 13, and then (skipping Part II) complete Lines 36 through 40 before moving on to column (b).

Part I - Annualized Income Installment Method

Line 1

Enter the Annualization Periods here. See the instructions section of the form for more details.

Line 2

Enter the taxable income for each Annualization Period.

Note that if your organization possesses certain extraordinary items, special rules apply. See the instructions section of the form for more details.

Line 3

Enter the annualization amounts here. See the instructions section of the form for more details.

Line 4

a. Multiply Line 2 by Line 3 and enter the product here.

b. Enter here the details on any Extraordinary Items and De Minimis items not declared by the organization in Line 2. See the instructions section of the form for more details on both.

c. Add lines 4a and 4b and enter the sum here.

Line 5

Figure the amount of tax in each column of Line 4c in the same manner that the tax was figured on Line 2 of Form 990-W.

Line 6

Enter the Alternative Minimum Tax and other taxes for each Annualization period. See the instructions section of the form for more details.

Line 7

Add Lines 5 and 6 and enter the sum in the columns here.

Line 8

Enter the credits to which the organization is entitled to for the months shown in each column on Line 1.

Line 9

Subtract Line 8 from Line 7 and enter the difference here. If the difference is zero or less, enter 0 instead.

Line 10

Enter the applicable tax percentage here.

Line 11

Multiply Line 9 by Line 10 and enter the product here.

Line 12

Enter here the total of all preceding columns of Line 40. See the instructions section of the form for more details.

Line 13

Subtract Line 12 from Line 11 and enter the difference here. If the difference is zero or less, enter 0 instead.

Part II - Adjusted Seasonal Installment Method

Important Note: Only use this method if the base period percentage for any 6 consecutive months is at least 70%. For more information, see the section in the Instructions for Part II, Section A.

Line 14 - Taxable Income for each period in the following years

a. Tax Year beginning in 2019

Enter the taxable income for each of the periods in 2019 as outlined in the columns.

b. Tax year beginning in 2018

Enter the taxable income for each of the periods in 2020 as outlined in the columns.

c. Tax year beginning in 2019

Enter the taxable income for each of the periods in 2021 as outlined in the columns.

Line 15

Enter the taxable income for each period in the current tax year as outlined in the columns.

Line 16 - Taxable Income for each period in the following years

a. Tax Year beginning in 2017

Enter the taxable income for each of the periods in 2019 as outlined in the columns.

b. Tax year beginning in 2018

Enter the taxable income for each of the periods in 2020 as outlined in the columns.

c. Tax year beginning in 2019

Enter the taxable income for each of the periods in 2021 as outlined in the columns.

Line 17

Divide the amount in each column in Line 14a by the amount on Line 16a column (d).

Line 18

Divide the amount in each column in Line 14b by the amount on Line 16b column (d).

Line 19

Divide the amount in each column in Line 14c by the amount on Line 16c column (d).

Line 20

Add Lines 17 through 19 and enter the sum here.

Line 21

Divide Line 20 by 3.0.

Line 22

a. Divide line 15 by Line 21, and enter the quotient here.

b. Enter the details for Extraordinary Items here. Consult the Instructions for details.

c. Add lines 22a and 22b.

Line 23

Figure the amount of tax on the amount on Line 22c in the same manner that the tax was figured on Line 2 of Form 990-W.

Line 24

Divide the amount on Line 16a, columns (a) through (c) by the amount on Line 16a, column (d).

Line 25

Divide the amount on Line 16b, columns (a) through (c) by the amount on Line 16b, column (d).

Line 26

Divide the amount on Line 16c, columns (a) through (c) by the amount on Line 16c, column (d).

Line 27

Add lines 24 through 26 and enter the sum here.

Line 28

Divide Line 27 by 3.0.

Line 29

Multiply Line 23 columns (a) through (c) by Line 28, columns (a) through (c). In column (d), enter the amount from Line 23, column (d).

Line 30

Enter any alternative minimum tax and/or other taxes for each period. See the instructions section of the form for more details.

Line 31

Add lines 29 and 30 and enter the sum here.

Line 32

For each period (column), enter the same type of credits as allowed in Line 5 of Form 990-W. See the instructions section of the form for more details.

Line 33

Subtract Line 32 from Line 31 and enter the difference here. If the difference is zero or less, enter 0 instead.

Line 34

Enter here the total of all preceding columns of Line 40. See the instructions section of the form for more details.

Line 35

Subtract Line 34 from Line 33 and enter the difference here. If the difference is zero or less, enter 0 instead.

Part III - Required Installments

Line 36

If only one of the previous two parts was completed, enter the amounts in each column from Line 13 or Line 35 here. If both parts were completed, enter the smaller of the amounts between each column in Line 13 or Line 35.

Line 37

Divide the amount on Form 990-W, Line 10c, by 4.0 then enter the quotient in each column.

Line 38

Subtract Line 40 of the preceding column from Line 39 of the preceding column. Enter the difference here.

Line 39

Add Lines 37 and 38 and enter the sum here.

Line 40

Enter the smaller of Line 36 or Line 39 here and on Form 990-W, Line 12.

Tips when filling out Form 990-W

Considering the length of Form 990-W, it is very important to make sure that one is putting the correct and necessary information in each part to avoid any legal issues.

Consult the Instructions Section often. The instructions section of the form, starting on page 4, contains important details that will aid greatly in identifying what information is needed for particular Lines in the form. Make sure to read the instructions well, and double-check them when the form prompts you to look at the Instructions for more details.

Double-check your information. Due to the length of Form 990-W, it is critical that you make sure you are putting the correct information in the correct Lines. Failure to do this risks accidentally putting the wrong information in the wrong place, resulting in the entire form needing to be redone.

Practice Good Contract Management. Keep a copy of this form (filled out) in a safe place. This is to make sure that you have a copy of it ready when necessary, whether for legal purposes or simply to serve as a record or backup.