IRS Form 990 or 990-EZ (Schedule A) – Nonprofit organizations play a vital role in society, and maintaining tax-exempt status requires careful compliance with IRS regulations. One key component is IRS Schedule A, attached to Form 990 or 990-EZ, which helps demonstrate an organization’s public charity status and level of public support. This article explores everything you need to know about Schedule A, including its purpose, who must file it, how to complete it, and tips for ensuring your organization meets the public support tests. Whether you’re a nonprofit leader, accountant, or donor, understanding this form is essential for transparency and compliance.
What Is IRS Schedule A?
IRS Schedule A, officially titled “Public Charity Status and Public Support,” is a required attachment for certain tax-exempt organizations filing Form 990 (Return of Organization Exempt From Income Tax) or Form 990-EZ (Short Form Return of Organization Exempt From Income Tax). Its primary purpose is to verify that an organization qualifies as a public charity rather than a private foundation, which has stricter rules and excise taxes. Public charities generally receive broad support from the public, government, or other sources, while private foundations are often funded by a small group of donors.
The form categorizes organizations based on their reason for public charity status and requires detailed reporting on financial support over a five-year period. This helps the IRS ensure organizations meet specific public support thresholds to avoid reclassification as a private foundation. Failing to maintain public charity status can lead to loss of tax-exempt benefits and additional filing requirements, such as switching to Form 990-PF.
Who Must File Schedule A?
Not all nonprofits need to file Schedule A, but it’s mandatory for those that:
- Are classified under section 501(c)(3) and are public charities.
- Fall under sections 501(e), 501(f), 501(j), 501(k), or 501(n).
- Are nonexempt charitable trusts under section 4947(a)(1) not treated as private foundations.
Organizations that answer “Yes” to Form 990, Part IV, line 1, or are required to file Form 990-EZ must attach Schedule A. Private foundations, however, should not file this schedule and instead use Form 990-PF.
If your organization is in its first five years as a 501(c)(3), you may qualify for a temporary public charity designation without completing the full support schedules, but you’ll still need to indicate your status in Part I. Always check the latest IRS instructions, as requirements can evolve—such as updates from the Pension Protection Act of 2006 reflected in recent regulations.
Key Parts of Schedule A
Schedule A is structured into six main parts, each serving a specific function. Here’s a breakdown:
| Part | Description | Key Requirements |
|---|---|---|
| Part I: Reason for Public Charity Status | All filers complete this. Check one box (lines 1-12) indicating why your organization is a public charity, such as a church (line 1), school (line 2), hospital (line 3), or supporting organization (line 12). | Based on your IRS determination letter; explain alternatives in Part VI if needed. |
| Part II: Support Schedule for Organizations Described in Sections 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi) | For organizations relying on broad public support (e.g., lines 5, 7, or 8 in Part I). | Report gifts, grants, and other support; calculate public support percentage over five years. |
| Part III: Support Schedule for Organizations Described in Section 509(a)(2) | For organizations with significant program service revenue (e.g., line 10 in Part I). | Similar to Part II but includes receipts from exempt activities; ensures investment income doesn’t exceed one-third of total support. |
| Part IV: Supporting Organizations | Required for supporting organizations (line 12 in Part I). | Details on supported organizations, type (I, II, or III), and compliance with control and integral part tests. |
| Part V: Type III Non-Functionally Integrated 509(a)(3) Supporting Organizations | For specific Type III supporting orgs. | Calculates distributable amounts and distributions to supported entities; ensures attentiveness and responsiveness. |
| Part VI: Supplemental Information | Provide explanations for unusual grants, facts-and-circumstances tests, or other details. | Required for many lines across the form; do not include donor names. |
This structure ensures comprehensive reporting while allowing organizations to focus on relevant sections based on their status.
Understanding the Public Support Tests
The core of Schedule A is proving your organization meets one of two main public support tests to qualify as a public charity:
- The 509(a)(1)/170(b)(1)(A)(vi) Test (Part II): Requires at least 33 1/3% of total support from public sources like donations, grants, and government contributions over five years. If under 33 1/3% but at least 10%, you may qualify under a “facts and circumstances” test, considering factors like public solicitation and diverse governance. Public support excludes contributions from disqualified persons (e.g., insiders) exceeding 2% of total support.
- The 509(a)(2) Test (Part III): Applies to organizations with revenue from activities related to their exempt purpose. Must have more than 33 1/3% public support and no more than 33 1/3% from investment income and unrelated business income. This test includes program service revenue but caps support from any one source at the greater of $5,000 or 1% of total support.
Both tests use a five-year computation period (current year plus prior four). Failing for two consecutive years results in reclassification as a private foundation. Track support throughout the year to avoid surprises.
How to Complete Schedule A: Step-by-Step?
- Gather Financial Data: Use the same accounting method as your Form 990 (cash or accrual). Report support on a five-year rolling basis, excluding “unusual grants” (large, unexpected contributions).
- Complete Part I: Select your charity type and provide details if applicable (e.g., list supported organizations for line 12).
- Fill Support Schedules (Parts II or III): Enter contributions, investment income, and other support. Calculate percentages—aim for at least 33 1/3% public support.
- Address Supporting Org Requirements (Parts IV-V): If applicable, demonstrate control, responsiveness, and distributions (e.g., at least 85% of adjusted net income for Type III non-integrated).
- Add Explanations in Part VI: Detail any facts supporting your status.
Use IRS instructions for line-by-line guidance, and consider software or professional help for accuracy.
Common Mistakes and Filing Tips
- Miscalculating Support: Forgetting to exclude excess contributions from large donors or including unrelated business income incorrectly.
- Ignoring Updates: Recent regulations (T.D. 9981) clarify rules for Type I and III supporting organizations—review for changes in control or distributions.
- Late Filing: Due dates align with Form 990 (15th day of the 5th month after fiscal year-end); extensions available via Form 8868.
- Tip: Maintain diverse funding sources to pass support tests easily. If close to failing, explain facts and circumstances in Part VI.
Recent Updates for 2025 and Beyond
As of 2025, instructions incorporate final regulations from October 2023 on supporting organizations, emphasizing notification, responsiveness, and integral part tests. No major changes for 2026 are noted yet, but always check IRS.gov for developments. Electronic filing is required for most organizations under the Taxpayer First Act.
Conclusion
IRS Schedule A is crucial for proving your nonprofit’s public charity status and ensuring ongoing tax-exempt benefits. By understanding the public support tests and completing the form accurately, you can maintain compliance and focus on your mission. For the latest form, download from the IRS website: Schedule A PDF. Consult a tax professional for personalized advice, and remember: broad public engagement is key to passing these tests.