Nonprofit Update: 2021 Form 990/990-PF/990-T Changes

The Updated 2021 Form 990

The 2021 form 990 has various minor changes to both the form and instructions. Listed below are some of the key changes you should be aware of this filing season:

1. Section 501(c)(21) Black Lung Trusts are required to file form 990/990EZ or 990-N. Form 990-BL is no longer available for 2021.
2. Part V Line 17 question was added specific to Black Lung Trusts. Has the Trust or any Disqualified Person engaged in any activity giving rise to the excise taxes under Section 4951 – Self Dealing; Section 4952 – Taxable Expenditures or Section 4953 – Excess Contributions?
3. Part VII Section A – Clarification of Officers, Directors, Trustees, Key Employees and HCE ordering rules. The instructions now consistently require reporting such person from the highest compensation to the lowest.
4. Part VII Section A and Schedule J Part II also references Form 1099-NEC when determining compensation for Officers, Directors, Trustees, Key Employees and HCEs.
5. Update on the Public Support Test Calculation for 509(a)(1) and 509(a)(2) organizations. Instructions were updated to public charities to include in the denominator of the public support test either the UBTI as determined by the final 512(a)(6) siloing regulations, or the UBTI calculated in the aggregate without factoring in the final regulations. This update affects the following line items for the public support tests:

• Schedule A Part II Line 9, and
• Schedule A Part III Line 10b/11

The Updated 2021 Form 990-PF

The 2021 form 990-PF has very minor changes to both the form and instructions. Listed below are some of the key changes you should be aware of this filing season:

1. 2021 Form 990-PF was updated to reflect the repeal of the Reduced Tax on Net Investment Income. Part V of the 2020 Form 990-PF was removed along with Part XI lines 5 and 6. The reduced tax on net investment income was repealed on December 20, 2019.
2. The instructions have been updated to explain the procedures of adopting a new accounting method. The accounting change language is now the same for the 990-T and 990-PF.

The Updated 2021 Form 990-T

The 2021 form 990-T contains various changes to both the forms and instructions to reflect the final Regulations under 512(a)(6). Listed below are some of the key changes that you should be aware of this filing season:

1. Part IV Line 4 was changed to track and report pre-2018 NOLs carried over to the 2021 tax year.
2. Part IV Line 5 was added to track and report the post-2017 NOL carryovers to the 2021 tax year within each separate unrelated trade or business consistent with IRC Section 512(a)(6).
3. Part IV Line 6 was added to address the previous Part IV Line 4 question of whether the organization changed its accounting method during the year.
4. Schedule A Unrelated Business Activity Code – If an organization changed the 2-digit NAICS code used to report a particular unrelated trade or business in the current year, the instructions require the organization to explain why it made that change.
5. As a reminder the 2021 Form 990-T must be electronically filed. The 2021 instructions omitted all details regarding paper filing returns.

For questions or guidance related to the updated 2021 form changes, contact VonLehman Nonprofit Tax Specialists, Bryan Pautsch, at bpautsch@vlcpa.com or Alex Bramer, at abramer@vlcpa.com, or by phone at 800.887.0437.