Differing dollar cutoff for filing California 199N and federal 990-N

The cut off for organizations being able to file a 199N with the California Franchise Tax Board instead of the longer 199 is gross revenue normally $25,000 or less. The cut off to file a 990-N instead of the longer 990-EZ with the IRS is $50,000.

What to do if your income is between 25,000 and 50,000? 

In that situation the organization can file the very simple 990-N with the IRS but is required to file the longer 199 with the FTB.  That makes reporting a bit more complicated, but not terribly so.

The same situation exists in Arizona.  Kathy E. Hostetler, CPA, has a good discussion on this issue at the Nonprofit GPS blog: Why Nonprofit Organizations Should File Tax Returns.  She explains the accounting to accumulate the information for the 990-EZ can be very simple.  Organizations with income between $25,000 and $50,000 ought to be able to accumulate this basic information in order to maintain accountability for receiving public funds.

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