What “gross receipts normally $50,000 or less” means
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The Form 990-N limit is not this year's receipts alone. The IRS says an organization's gross receipts are normally $50,000 or less if it meets the test for its age:
| Age of the organization | Test | |---|---| | One year or less | It received, or donors pledged, $75,000 or less in its first tax year. | | Between one and three years | It averaged $60,000 or less in gross receipts in each of its first two tax years. | | Three years or more | It averaged $50,000 or less over the preceding three tax years, including the year you are filing for. |
Gross receipts are everything the organization took in during the year from all sources (donations, dues, program fees, sales, fundraising events), before subtracting costs.
If you do not meet the test, you file Form 990-EZ or Form 990 instead. See 990-N or 990-EZ?.
An organization that may file the 990-N can still choose to file a 990-EZ or 990.
Questions
Our receipts were $55,000 this year but $40,000 the two years before. Can we file a 990-N?
If the organization is at least three years old, the IRS averages the three tax years ending with this one. ($55,000 + $40,000 + $40,000) / 3 = $45,000, which is $50,000 or less, so the 990-N is allowed.
Are gross receipts the same as profit?
No. Gross receipts are the total amounts received from all sources during the year, before subtracting any costs or expenses.