Understanding the "Most Common" Form 990 Schedules: A, B & O - Virtual-Supplement - Borenstein Annotated Sch A

Supplement - Borenstein Annotated Sch A _Parts II-III Grids

Pdf Summary

The document is a concise annotation guide for completing Schedule A’s public support testing grids for nonprofit tax reporting. It explains how the numerator and denominator work in two different public support tests.<br /><br />For the Part II test, the numerator is public support from “true gifts and grants,” with Line 1 as the main source. It notes that Paycheck Protection Program loan forgiveness may count as a government grant, and that organizations using ASC 95 may report multi-year grants at present value over time. Line 9 also includes net fundraising event and sales income transferred from Form 990’s Statement of Revenue, but this amount cannot be negative. The denominator includes several additional support categories, such as revenues on Line 2 and Line 3, even though these may be uncommon or not reported on the main Form 990. Line 5 identifies excess contributions from donors whose total gifts exceed 2% of total support over five years.<br /><br />The Part III test similarly uses public support over a broader denominator, but it distinguishes between support from related activities, excluded unrelated activities under IRC section 513, and other income sources. It emphasizes that Line 1 gifts and grants remain included, while certain gifts and earned income from “disqualified persons” are excluded. It also excludes some earned income above a threshold of $5,000 or 1% of annual support, whichever is greater. Additionally, this test includes net income from unrelated trade or business activities not excluded by section 513, as well as other 990-T income and net income from not regularly carried on unrelated businesses.<br /><br />A key reminder is that Line 12 is not part of the Part II test; it is only a memorandum line, though its receipts matter for Part III.

Keywords

Schedule A

public support testing

nonprofit tax reporting

Part II test

Part III test

numerator and denominator

true gifts and grants

PPP loan forgiveness

IRC section 513

Form 990