Form 990-T is the IRS return a tax-exempt organization files to report and pay tax on unrelated business income, meaning income from a regularly carried on trade or business that isn't substantially related to its exempt purpose. An exempt organization must file it if it has gross income of $1,000 or more from an unrelated trade or business. IRAs and similar accounts can owe it too.
Everything below comes from the IRS Instructions for Form 990-T (2025), the form itself and the IRS About Form 990-T page, as of October 2026.
What the form is used for
- Reporting unrelated business income, and working out and reporting the unrelated business income tax on it.
- Reporting proxy tax liability on lobbying and political expenditures.
- Claiming a refund of income tax paid by a regulated investment company or real estate investment trust on undistributed long-term capital gain.
- Requesting a credit for certain federal excise taxes or for small employer health insurance premiums.
- Reporting unrelated business income tax on reinsurance entities.
It's separate from the annual information return. A charity can file Form 990 and still owe a 990-T on top if it runs a business on the side.
Who has to file
The filing test is gross income, not profit, and it's easy to cross without noticing. The instructions say an organization exempt under section 501(a), 529(a) or 529A(a) files if it has gross income of $1,000 or more from a regularly conducted unrelated trade or business. Gross income here is gross receipts minus the cost of goods sold. Colleges and universities run by states and their wholly owned subsidiaries are covered by the same test.
The part individual investors miss: IRAs, including SEPs and SIMPLEs, Roth IRAs, Coverdell education savings accounts and Archer MSAs, are on the list of filers. A self-directed IRA holding a business interest that throws off unrelated business income can need its own 990-T. The instructions note individual retirement annuities, unlike IRAs, aren't subject to the tax.
Due dates
| Filer | Due date |
|---|---|
| Employees' trusts under section 401(a), IRAs (including SEPs and SIMPLEs), Roth IRAs, Coverdell ESAs, Archer MSAs | 15th day of the 4th month after the end of the tax year |
| All other organizations | 15th day of the 5th month after the end of the tax year |
If the date falls on a weekend or legal holiday, file by the next business day. Every entity filing a 990-T uses Form 8868 to ask for an extension of time to file.
The tax and the $1,000 deduction
For organizations taxed as corporations, Part II, line 1 multiplies the taxable income on Part I, line 11, by 21% (0.21). Before that, Part I, line 8 allows a specific deduction of $1,000, so a small side business doesn't pay on its first dollars of net income. Trusts, including IRAs, follow trust rates instead. These figures are from the 2025 instructions, as of October 2026.
One Schedule A for each business
Since tax years after 2017, losses from one unrelated business can't wipe out profits from another. The instructions say an organization with unrelated business taxable income completes Form 990-T and a separate Schedule A (Form 990-T) for each separate unrelated trade or business, and fills in every Schedule A before Parts I to V of the main form. Net operating losses are tracked trade by trade too, the instructions' siloed post-2017 NOLs, and a loss from one business is carried forward against that same business.
| If you run | Schedules A needed |
|---|---|
| One unrelated trade or business | One |
| Two separate unrelated trades or businesses | Two, one for each |
| Only the proxy tax on lobbying | None; complete the heading, Parts II and III and the signature |
Filing it, step by step
- Work out gross income from each unrelated trade or business for the year and check the $1,000 test.
- Complete a Schedule A for each separate business, with its own income, deductions and loss carryforward.
- Carry the totals into Part I, take the $1,000 specific deduction, and figure the tax in Part II.
- Add any credits and payments in Part III, including estimated tax already paid.
- File electronically: the instructions say organizations and trusts under section 511 that need to file Form 990-T are required to e-file.
- File by the 15th day of the 4th or 5th month, or extend with Form 8868.
Common mistakes
- Assuming a nonprofit never owes tax. It's exempt on its mission income, but not on an unrelated trade or business it regularly carries on.
- Testing profit instead of gross income. The $1,000 line is gross receipts minus cost of goods sold, before other expenses.
- Netting one business's loss against another's profit. Since 2017 they're kept apart, each on its own Schedule A.
- Missing the IRA deadline. IRAs file a month earlier than most organizations, by the 15th day of the 4th month.
- Filing on paper. Organizations and trusts under section 511 that need to file must e-file.
Paying through the year
Organizations that expect to owe unrelated business income tax are generally expected to pay it in estimated instalments, and the instructions cover penalties under section 6655 for not doing so. If last year's 990-T showed tax due, set up quarterly payments this year rather than waiting for the return.
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The verdict
If your nonprofit sells something unrelated to its mission, or your IRA owns a slice of an operating business, check the $1,000 gross income test every year. Below it, there's nothing to file. Above it, keep each business on its own Schedule A, e-file, and mark the 4th or 5th month deadline, which is earlier than many people expect for IRAs. If you're still setting up the organization, exemption itself starts with Form 1023.
Frequently asked questions
Who has to file Form 990-T?
An exempt organization with gross income of $1,000 or more from a regularly conducted unrelated trade or business, as well as IRAs and certain other accounts that meet that test.
When is Form 990-T due?
IRAs, Roth IRAs, Coverdell ESAs, Archer MSAs and section 401(a) employees' trusts file by the 15th day of the 4th month after the tax year ends. All other organizations file by the 15th day of the 5th month.
What is the tax rate on Form 990-T?
For organizations taxed as corporations, Part II, line 1 multiplies taxable income by 21%. Trusts, including IRAs, use trust rates.
Do I need a separate Schedule A for each business?
Yes. An organization with unrelated business taxable income completes a separate Schedule A (Form 990-T) for each separate unrelated trade or business.
Can Form 990-T be filed on paper?
The instructions say organizations and trusts defined in section 511 that need to file Form 990-T are required to file electronically.
