IRS Instruction 990 or 990-EZ (Sch A) – Nonprofit organizations exempt under section 501(c)(3) of the Internal Revenue Code must maintain public charity status to enjoy fewer restrictions than private foundations. Schedule A (Form 990 or 990-EZ) is the key IRS form that documents this status and demonstrates compliance with public support tests. Filing it correctly helps organizations avoid reclassification as a private foundation, which triggers stricter rules, excise taxes, and distribution requirements.
This comprehensive guide explains the 2025 instructions for Schedule A, who must file it, how to complete each part, the public support tests, and practical tips. It draws from official IRS sources for accuracy.
What Is Schedule A (Form 990 or 990-EZ)?
Schedule A reports an organization’s public charity status under sections 509(a)(1), 509(a)(2), or 509(a)(3) and calculates public support over a five-year period (current tax year plus the four preceding years). It attaches to Form 990 or Form 990-EZ for most 501(c)(3) organizations (and certain others treated as such).
Private foundations file Form 990-PF instead and generally skip Schedule A.
Public charity status matters because it allows broader fundraising, avoids private foundation excise taxes on net investment income, and imposes fewer restrictions on grants and activities.
Who Must File Schedule A?
- Organizations answering “Yes” on Form 990, Part IV, line 1.
- All section 501(c)(3) organizations (or those treated as such) filing Form 990-EZ.
- Includes organizations under sections 501(e), 501(f), 501(j), 501(k), or 501(n), and nonexempt charitable trusts under section 4947(a)(1) that are not private foundations.
Newly formed 501(c)(3) organizations generally qualify automatically for their first five years but must monitor support and complete Schedule A starting in year 6 (or earlier if filing Form 990).
Download the official instructions: Get the latest 2025 Instructions for Schedule A (Form 990 or 990-EZ) directly from the IRS here: https://www.irs.gov/pub/irs-pdf/i990sa.pdf. Always use the current version when preparing your return.
Public Charity Status vs. Private Foundation Status
The IRS classifies most 501(c)(3) organizations as either public charities or private foundations. Public charities typically receive broad public support, while private foundations rely more on a small group of donors or endowments.
Schedule A helps prove you qualify as a public charity through specific categories or quantitative public support tests.
Part I: Reason for Public Charity Status (All Organizations Complete This)
In Part I, check only one box (lines 1–12) that best describes your organization’s basis for public charity status. This can differ from your original determination letter—explain any differences in Part VI.
Common categories include:
- Line 1: Church or association of churches.
- Line 2: School (attach Schedule E).
- Line 3: Hospital or cooperative hospital service organization.
- Line 7 or 8: Organization that normally receives substantial support from governmental units or the general public (complete Part II).
- Line 10: Organization that receives more than 33⅓% of support from contributions, membership fees, and gross receipts from related activities, with no more than 33⅓% from investment income (complete Part III).
- Line 12: Supporting organization (509(a)(3))—specify Type I, II, III functionally integrated, or III non-functionally integrated and complete Parts IV and (if applicable) V.
If none apply, the organization may be a private foundation and should file Form 990-PF.
The Public Support Tests: Parts II and III
Most organizations without a specific classification (like churches or hospitals) must pass one of two quantitative tests over a rolling 5-year period.
509(a)(1) / 170(b)(1)(A)(vi) Test (Part II)
This test applies to organizations primarily supported by contributions from the public or government.
- 33⅓% Public Support Test: Public support (government grants, contributions from the general public, and certain other sources) must be at least 33⅓% of total support.
- 10% Facts-and-Circumstances Test: If public support is at least 10%, the organization may still qualify by showing it is publicly supported based on factors like a broad solicitation program, diverse board, public programs, and low reliance on investment income. Explain these in Part VI.
Key calculations (simplified):
- Exclude “unusual grants” (large, unexpected contributions that could jeopardize status—list amount only in Part VI).
- Limit contributions from any single donor to 2% of total support (with exceptions for public charities and governments).
- Total support includes gifts, grants, investment income, and unrelated business income (with modifications).
509(a)(2) Test (Part III)
This test suits organizations with significant program service revenue (e.g., museums, theaters, or educational service providers).
- More than 33⅓% of support from contributions, membership fees, and gross receipts from activities related to the exempt purpose (subject to per-person limits).
- No more than 33⅓% of support from gross investment income and unrelated business taxable income (post-1975 acquisitions).
Key differences from Part II:
- Program service revenue (e.g., ticket sales, fees) counts toward public support in Part III but is generally excluded from the numerator (and often denominator) in Part II.
- Excess receipts from any single person (greater of $5,000 or 1% of total support) are excluded from public support.
Comparison of Public Support Tests
| Aspect | 509(a)(1) / Part II Test | 509(a)(2) / Part III Test |
|---|---|---|
| Primary Support Source | Contributions & government grants | Contributions + related gross receipts |
| Public Support Threshold | ≥33⅓% (or ≥10% + facts & circumstances) | >33⅓% from qualified sources |
| Investment/UBI Limit | Not strictly limited (affects facts test) | ≤33⅓% of total support |
| 2% Donor Limit | Applies to most individual contributions | Does not apply the same way |
| Best For | Donor-driven charities (e.g., advocacy, grantmakers) | Program revenue-heavy orgs (e.g., schools, hospitals with fees) |
Supporting Organizations (Part IV and Part V)
Supporting organizations under 509(a)(3) operate exclusively to support one or more specified public charities. They are classified as:
- Type I: Operated, supervised, or controlled by supported organizations (like a parent-subsidiary).
- Type II: Supervised or controlled in connection with supported organizations (common control).
- Type III: Operated in connection with supported organizations (requires responsiveness and either functional integration or distribution/attentiveness requirements).
2025 updates reflect final regulations (T.D. 9981) on Type I and Type III supporting organizations, including notification, responsiveness, integral part, and distribution rules for non-functionally integrated Type III organizations.
Type III non-functionally integrated organizations must generally distribute at least 85% of their adjusted net income or minimum asset amount and meet attentiveness tests (Part V).
Accounting Method and Other Important Rules
Use the same accounting method (cash or accrual) as reported on Form 990, Part XII, line 1 (or Form 990-EZ, line G). For distributions in Part V, use the cash method. If you changed methods, re-compute prior years using the current method and explain in Schedule O.
Other notes:
- Do not include donated services or use of facilities as contributions (except certain government-provided ones).
- Track disqualified persons and excess contributions privately (do not attach donor lists to the public return).
- Unusual grants are excluded but require strong documentation.
Common Mistakes to Avoid
- Checking the wrong box in Part I or failing to complete required supporting parts.
- Misclassifying revenue (e.g., treating program fees as contributions in Part II).
- Forgetting to exclude unusual grants or apply 2%/1% limitations correctly.
- Inadequate explanations for facts-and-circumstances or supporting organization relationships in Part VI.
- Not monitoring the 5-year test annually, especially in early years.
Tips for Nonprofits Filing Schedule A
- Start tracking support data early each year.
- Maintain detailed records of donors, grant purposes, and unusual contributions.
- Use tax software or a qualified CPA experienced with Form 990 for complex calculations.
- If close to failing a test, consider strategies like diversifying fundraising or seeking IRS guidance via Form 8940 for status changes.
- Review the full instructions PDF and IRS resources at IRS.gov/Form990 for examples and worksheets.
Download the PDF instructions here: IRS Instructions for Schedule A (Form 990 or 990-EZ) – 2025.
Frequently Asked Questions (FAQ)
What is the public support test?
It measures whether an organization receives enough support from the general public or government (vs. a small group of donors or investments) to qualify as a public charity.
How do I calculate the public support percentage?
Divide qualifying public support by total support over the 5-year period (details in Parts II or III of Schedule A).
Can my organization switch between 509(a)(1) and 509(a)(2) status?
Yes, if it meets the requirements—check the appropriate box in Part I and complete the corresponding support schedule.
What happens if we fail the public support test?
The organization may be reclassified as a private foundation and must file Form 990-PF going forward. Advance planning and IRS relief options may be available in some cases.
Do churches need to complete the support schedule?
No—churches (line 1) are automatically public charities and generally skip Parts II and III.
Final Advice
Accurately completing Schedule A protects your nonprofit’s tax-exempt status and public charity classification. The rules are detailed, and errors can have significant consequences. Consult a qualified tax professional or CPA familiar with nonprofit taxation for your specific situation, especially for supporting organizations or borderline public support calculations.
For the most current information, always refer to the official IRS instructions and website. The 2025 version linked above is the authoritative source.
This article is for informational purposes only and is not tax or legal advice.
Sources: Official IRS Instructions for Schedule A (Form 990 or 990-EZ) 2025 and related IRS guidance on public charity support tests. Always verify with the latest IRS publications.