Common questions about Exempt Organizations in Lacerte

File Form 990 by the 15th day of the 5th month after the organization's accounting period ends (May 15th for a calendar-year filer). If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. A business day is any day that isn't a Saturday, Sunday, or legal holiday. Exempt organizations (990 series filers) are typically due May 15th, but may timely file six-month extensions which allow submitted returns by November 15th. E-filed returns transmitted before midnight in your timezone will be considered timely.

Per Form 990 instructions for Part VIII, line 1e,

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established the Paycheck Protection Program (PPP) to provide loans to small businesses as a direct incentive to keep their workers on the payroll. The loans are forgiven if all employee retention criteria are met and the funds are used for eligible expenses. Amounts of PPP loans that are forgiven may be reported on line 1e as contributions from a governmental unit in the tax year that the amounts are forgiven.

Input for Part VIII line 1e, Government grants, can be found in Screen 16.1, Contributions, Gifts, and Grants under the Contributions, Gifts, Grants section.

Lacerte can print a PUBLIC DISCLOSURE COPY of Schedule B, Schedule of Contributors.

• On page 1, PUBLIC DISCLOSURE COPY is printed above the form title.
• On other pages, contributor names and addresses are omitted, but other information about the contribution is shown.

There are two ways to print the public disclosure copy:

1. Go to Screen 16.1, Contributions, Gifts, and Grants.
2. Scroll to the Miscellaneous - Schedule of Contributors section.
3. Check the box Apply public disclosure copy.

OR

1. Go to Settings -> Options.
2. Select Items to Print tab.
3. Under the Print Settings section, change Public Disclosure Copy of Schedule B to 'Yes'.

Additional Information:

• When neither condition applies, the filing copy (complete with contributor's personal information) is generated.
• The setting under Items to Print is set separately for each copy of the return (preparer file, client, government). The forms view reflects the option selected for the Preparer Review copy.
• The Public Disclosure Copy cannot be e-filed. Doing so will generate the following e-file rejection: Error Code SB-F990-013: On Schedule B (Form 990, 990-EZ, or 990-PF), Part I each entry for "Contributors" must be complete. If Column (b) for an entry in Part I contains the value "Pd. 527(j)(1)" (checkbox "Pd527j1 is checked), then "Aggregate contributions" must have a value. If Column (b) for an entry contains a value other than "Pd. 527(j)(1)", then "Number", "Name", "Address" and "Aggregate contributions" must have a value and one or more of the checkboxes for Type of Contribution - "Person", "Payroll" or "Noncash" must be checked

As of tax year 2011, the IRS requires a PTIN for all returns. Before 2011, your SSN, PTIN, and Employer Identification Number (EIN) weren't required unless your organization was a section 4947(a)(1) nonexempt charitable trust.

To show that your organization is a 4979(a)(1) trust:

1. Go to Screen 1, Client Information.
2. Scroll to the Return Info section.
3. Select the box labeled 4947(a)(1) Nonexempt.

Usually this happens if you've entered overrides on one of the following screens:

• Items of income overrides on Screen 18, Other Income Producing Activities.
• Expense overrides on screens 34–46.
• Balance sheet overrides on Screen 50.1.

Schedule A is only required for certain organizations. There are three ways to generate Schedule A:

Option 1:

1. Go to Client Information.
2. Scroll to the Return Info section. I
3. In the field labeled 501(c) Paragraph No, select 3=Charitable, Religious, Educational, Scientific, etc. from the dropdown menu.

Option 2:

1. Go to Client Information.
2. Scroll to the Return Info section.
3. Select the box labeled 4947(a)(1) Nonexempt.

Option 3:

1. Go to Screen 4.1, Misc. (990-N, 990, 990-PF, 990-T).
2. Scroll to section Form 990 Miscellaneous.
3. Select the box labeled Section 501(e), 501(f), 501(k), or 501(n) org.

To input an amount on Schedule A page 2, part II, Line 12 follow these instructions:

1. Navigate to Screen 52.2 Support Information.
2. Under the section Support information (Schedule A), enter the amount in the Gross receipts from related activities (Part II, Line 12) (Code 52).

Note: Schedule A Part II will only generate if boxes on Lines 5, 7, or 8 of Page 1 Part I is checked.

To select the first Special Rules box on Schedule B, check for the following:

• Your organization is a 501(c)(3) organization filing Form 990 or Form 990-EZ.
• You selected the following boxes on Part 1 of the Schedule A (See Screen 52.1, Public Charity Status for the input):
  • Organization is operated for the benefit of a college or university owned or operated by a governmental unit (Section 170(b)(1)(A)(iv)) (Line 5)
  • Organization is one that normally receives a substantial part of its support from a governmental unit or the general public (Section 170(b)(1)(A)(vi)) (Line 7)
  • Organization is a community trust (Section 170(b)(1)(A)(vi)) (Line 8)
• Your organization passes the 33 1/3 percent rule on Schedule A, page 2, line 14.

Form 4562 isn't required for Form 990 or Form 990-PF, since the depreciation is a book deduction, not a tax deduction.

To force Form 4562:

1. Go to Screen 4.1, Misc. (990-N, 990, 990-PF, 990-T).
2. Under the Return Options section, check the following input fields for overrides:
   • Form 4562 (990): 1=yes, 2=no [O]
   • Form 4562 (990-PF): 1=yes, 2=no[O]

The most common answer is that your organization didn't have more than $5,000 in assets during the year.

Also, make sure you've filled out inputs on Screen 43.3, Grants and Allocations to make sure Form 990-XV is complete.

1. Go to Screen 4.1, Miscellaneous.
2. Under section Form 990-PF, Miscellaneous, select the box labeled Do not complete Part I col. (c) - Adjusted Net Income (code 38).

1. Ensure Officers are entered through Screen 2 Officers, Directors, Trustees, Managers.
2. Go to Screen 38.1 Officers, Directors, Trustees Compensation.
3. Select the applicable Officer from the Officer, Director box in the bottom, left of the program.
4. Under the sub-heading Form 990 & 990-PF, there is a checkbox for Includes compensations from unrelated organizations reportable on Form 990 Part VII and Schedule  J.
5. Repeat for each applicable officer, director, trustee, etc.

The question on Line 4 is blank on form 990 page 3 part IV.

This question will remain blank until the entity is identified as a Section 501(c)(3) organization.

If this entity is a Section 501(c)(3), it must be indicated on the Screen 1 Client information.

1. Navigate to Screen 1 Client information.
2. Scroll down to the Return Info section.
3. Selecting 3 in the field 501(c) Paragraph no. will change line 4 to a No.
4. To change this to a Yes, go to Screen 53.1 Political Campaign & Lobbying Acts (Sc C)
5. In the section Lobbying Expenditures, enter either a 1 or 2. This will change line 4 to a Yes

The Lacerte program will generate only Part I or Part II of the Schedule N, not both.  Per the schedule instructions:

"An organization that liquidated, terminated, or dissolved and ceased operations, other than to wind up its affairs, must complete Part I.  An organization must report a significant disposition of net assets in Part II. For an organization filing Form 990-EZ, see the Instructions for Form 990-EZ, line 36, for Part II reporting requirements. An organization that has terminated its operations and has no plans for future activities need only complete Part I and not Part II of this Schedule."

To generate Part I:

1.  Go to screen 8.2, Dissolution or Significant Disposition.

2.  Enter information about the Transferred Assets.

4.  Check any other applicable boxes.  DO NOT check the box that says "Significant disposition of assets (Part II)"

To generate Part II:

1.  Go to screen 8.2, Dissolution or Significant Disposition.

2.  Enter information about the Transferred Assets.

4.  Check the box that says "Significant disposition of assets (Part II)

5.  Check any other applicable boxes.

To populate columns B, C, and D, Allocation Percentages are required.

1. Go into Screen 34, Functional Expenses (990).
2. In the Allocation Percentages section at the top, enter percentages in decimal format into these fields:
   • Program services (.xxxx)
   • Management and general (.xxxx)
   • Fundraising (.xxxx)

Lacerte applies the entered percentage against the total expense for each line to calculate each column.

Use the override fields in the Expenses section when the allocation for an expense differs from the percentages entered above.

1. Go to Screen 1, Client Information.
2. Scroll to the section Return Info.
3. In the 990-T Return Type dropdown menu, select an entry.

The IRS Form 990-T instructions say that:

• If Part I, line 13, column A is more than $10,000, you should complete all lines and schedules that apply.
• If line 13, column A is $10,000 or less, you should complete Part 1, lines 1–13, column A.
• Schedules A–K aren't required.
• An override is available on Screen 4.1, Miscellaneous, under Form 990-T Miscellaneous. Select the box labeled Complete all parts and schedules.

1. On Screen 1, Client Information, go to the Return Information section.
2. Verify 990-T Return Type is set to N/A and 990-T Other Exemption also indicates N/A.

To generate Form 990-T, Schedule J, you need entries on Screen 32, Advertising Income (990-T) in the following fields:

• Name of periodical
• 1 = income reported on a consolidated basis, 2 = income reported on a separate basis (code 1)

Also, a minimum of one of the following fields must contain data:

• Gross Advertising income (code 2)
• Direct advertising costs (code 3)
• Circulation income (code 4)
• Readership costs (code 5)

Per the IRS 990-T form instructions under section Is Gross Income More Than $10,000?, if the amount in Part I, line 13, column A, is more than $10,000, complete all lines and schedules that apply.

Per instructions under section Is Gross Income $10,000 or Less?, if Part I, line 13, column A is $10,000 or less, complete the following:

• The heading (above Part I);
• Part I, lines 1–13, column (A);
• Part I, line 13, for columns (B) and (C);
• Part II, lines 29–34;
• Parts III–V, and
• Signature area.

Selecting Complete all parts and schedules (code 30) in Screen 4.1, Miscellaneous, Form 990-T will force the Schedule J.

To have a particular schedule flow to Form 990-T, Page 2, Schedule A - Cost of Goods Sold, these fields must have values in Screen 26, Inventory Sales:

• Business Code (MANDATORY for Form 990-T)
• Ending Inventory

To have a particular schedule flow to Form 990-T, Page 2, Schedule A - Cost of Goods Sold, these fields must have values in Screen 26, Inventory Sales:

• Business Code (MANDATORY for Form 990-T)
• Ending Inventory

These instructions are for form 990-T prior to 2020. For questions regarding 2020 and forward Sch A, refer to 990-T instructions in the "Which Parts to Complete" section.

Form 990-T income amounts are generating on page 1, column A but the schedules are not being completed. Why?

Solution

Verify if the amount on Form 990-T, line 13, column (A), is $10,000 or less. If it is, Schedules A through K will not generate. Per the Form 990-T instructions,

Complete lines 1 through 13, column (A). If the amount on line 13 is $10,000 or less, you may complete only line 13 for columns (B) and (C). These filers do not have to complete Schedules A through K (however, refer to applicable schedules when completing column (A)). If the amount on line 13, column (A), is more than $10,000, complete all lines and schedules that apply. Refer to the corresponding schedules to determine the amount to be reported on each line.

To force schedules to generate:

1. Go to Screen 4.1, Miscellaneous
2. Scroll down to the Form 990-T Miscellaneous subsection
3. Check the box labeled Complete all parts and schedules