Common questions for exempt organizations (Form 990, 990-PF, or 990-T) in ProConnect

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 Revenue > Contributions, Gifts, and Grants > Contributions, Gifts and Grants.

In tax year 2018, IRS instructions for Schedule B changed.

• Many organizations aren't required to report the names and addresses of donors on Schedule B.
  • Only section 501(c)(3) organizations and section 527 organizations must still report this information.
• The program will automatically suppress donor information on Schedule B when it's not required based on the organization type entered on the General > Client Information screen.
• See IRS Instructions for Schedule B for additional information.

The most common answer to this question is that overrides were entered, prohibiting a statement from generating.

1. Go to the Check Return tab and click on Suggestions, on the left, to view a list of entered overrides.
2. For income items, the overrides are likely on the Revenue>Other Income Producing Activities screen.
3. Expenses may be overridden on the Expenses>Functional Expenses screen.
4. Balance sheet items may be overridden on the Balance Sheet> Balance Sheet screen.

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

• You can force Form 4562 to generate under General > Misc. (990-N, 990, 990-PF, 990-T) and then scrolling down to the subsection Return Options. In the field Form 4562 options: 1=when applicable, 2=force [Override], enter 2.

Schedule A is only required for certain organizations. There are 3 ways to indicate that Schedule A is required:

• On the General > Client Information screen, in the 501(c) Paragraph No field, select 3=Charitable, Religious, etc.
• On the General > Client Information screen, check the box 4947(a)(1) Nonexempt.
• On the General > Misc. (990-N, 990, 990-PF, 990-T) screen, under the section Form 990 Miscellaneous, check the box Section 501(e), 501(f), 501(k), or 501(n) org.

Multiple pieces of information affect this checkbox. Verify the following items:

• On the General > Client Information screen, Type of Return is set to 1=990/990-EZ, and 501(c) Paragraph No is set to 3=Charitable, etc.
• On Schedule A, Part 1, box 5, 7, or 8 is checked. Inputs can be found on the Form 990 Schedules > Charity Status & Support (Sch. A)>Reason for Public Charity Status screen.
• The organization must also past the 33 1/3 percent rule on Schedule A, page 2, line 14.

The most common reason is that the organization didn't have more than $5,000 in assets during the year. See How to generate Form 990-PF, Part XV in ProConnect Tax for more information.

Go to General >Misc.(990-N, 990, 990-PF, 990-T) and scroll down to the Form 990-PF Miscellaneous subsection. Check the box Do not complete Part I, col. (c) - Adjusted Net Income.

Page 4 of the 990-T instructions state that if Part I, line 13, column A is more than $10,000, complete all lines and schedules that apply. If line 13, column A is $10,000 or less, complete Part I, lines 1-13, column A. Schedules A-K aren't required.

1. Go to the Input Return tab.
2. On the left-side menu, select General.
3. Click on the Client Information screen.
4. Scroll down to the Return Info section.
5. Make a selection other than 1=N/A in 990-T Return Type.

Per the 990-T form instructions, Schedule J will only generate when gross income is more than $10,000.

1. Go to the Input Return tab.
2. On the left-side menu, select Revenue.
3. Click on Advertising Income (990-T).
4. Enter the Name of periodical.
5. Enter a 1 or 2 in 1=income reported on a consolidated basis, 2=income reported on a separate basis.
6. Make an entry in at least one of the fields:
   • Gross advertising income
   • Direct advertising costs
   • Readership costs
   • Circulation income