Understanding IRS Forms 990 and 990-T
Financial Compliance and Transparency
As a tax-exempt, not-for-profit institution, Ithaca College is required to file IRS Form 990, Return of Organization Exempt from Income Tax. Through this annual disclosure, the college (1) reports the results of its financial operations along with certain supplemental data, and (2) preserves its status as a 501(c)(3) organization exempt from income tax.
Like most institutions of higher education, the college engages in ancillary business activities unrelated to its tax-exempt purpose. The college files IRS Form 990-T, Exempt Organization Business Income Tax Return to report unrelated business income tax associated with these ancillary activities.
Together, Form 990, Form 990-T and externally audited financial statements provide transparency to the general public regarding the college’s financial transactions during the fiscal year and financial position at the end of the fiscal year. It is in the college’s best interest to make the data, transactions, and amounts reported to the IRS on Forms 990 and 990-T as accurate and descriptive as possible to help attest that the college is operating within standard financial practices for tax-exempt organizations.
Finding Forms 990 and 990-T
The Internal Revenue Code (IRC) requires organizations to make its Forms 990 and 990-T available for public inspection. Links to copies of the college's Forms 990 filed since 2007 as well as the college's audited financial statements can be found on the left side of this page. Copies of Form 990-T are available upon request from the Office of Business and Finance. The Office of Business and Finance prepares the returns with the assistance of Grant Thornton LLP, an international accounting firm with expertise in tax law applicable to institutions of higher education.
Deadline for filing Form 990
With the college’s fiscal year ending June 30, Form 990 is due to the IRS by May 15 of the following year.
Reported in Form 990
The amount of information reported by the college in Form 990 is extensive. Form 990 includes:
- An organizational summary and statement of accomplishments;
- Statements about other IRS filings and tax compliance;
- Information about the governing body and management of the college and its policies;
- Compensation of officers, trustees, key employees, former officers and key employees, and highest compensated employees;
- Statement of revenue;
- Statement of functional expenses;
- Balance sheet and reconciliation of net assets; and
- Various supplementary schedules.
COMPENSATION OF OFFICERS, TRUSTEES, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES
Form 990 Part VII and Form 990 Schedule J specifically address compensation of officers, trustees, key employees, former officers and key employees, and the five most highly compensated employees.
- Officers are persons listed in the college’s bylaws and include the chair and vice chair of the Board of Trustees, the president, and all vice presidents.
- Trustees are all who served as trustees during the fiscal year, including the student trustee, staff trustee, and faculty trustee.
- Key employees are those are individuals who received reportable compensation in excess of $150,000 for the calendar year ending within the college’s fiscal year, and also meet the “responsibility test” (having significant responsibility or power) outlined in instructions to Form 990.
- Former officers and key employees include employees listed as officers or key employees on a previous Form 990 and who meet certain compensation thresholds for the calendar year ending within the current Form 990.
- Highest compensated employees are five employees chosen from the remainder of individuals not already listed as trustees, officers, key employees, or former officers and key employees.
TYPES OF COMPENSATION
Compensation reported on Form 990 Part VII and Form 990 Schedule J includes amounts reported on IRS Form W-2 Wage and Tax Statement as well as other compensation. Below is a summary of the common types of compensation reported on Form 990. Additional information about compensation is narrated on Form 990 Schedule J Part III.
Form W-2 compensation:
Bonus and incentive compensation.
Other reportable compensation such as accrued and unused vacation time, additional duties pay, and retirement incentives.
Additional duties pay: Faculty and staff who perform additional duties and meet certain eligibility requirements are entitled to receive additional compensation while performing these additional duties.
Unused vacation time: Upon departure from college employment, employees are generally eligible for a payout of accumulated unused vacation time.
Payout of deferred compensation. The payout of the vested balance of the IRC Section 457(f) supplemental non-qualified retirement plan is included in Form W-2. This is generally an accumulation of deferred compensation over multiple years
Employer contributions to IRC Section 403(b) retirement plan.
- Deferred compensation to IRC Section 457(f) supplemental non-qualified retirement plan. This is a standard component of many officer and president compensation packages. The employee receives cash payouts and amounts are included in Form W-2 only when fully vested in the plan.
- Employer portion of health plan premiums.
- Tuition remission for eligible dependents. Eligible employees may receive tuition remission benefits covering the balance due of the tuition charged for undergraduate courses taken at IC by qualifying dependents, less any scholarships and grants creditable toward tuition.
TIMING OF COMPENSATION REPORTING
Although the reporting period of Form 990 is the college’s fiscal year, actual compensation reported is based on the calendar year ending within the fiscal year. For example, the Form 990 filed by the extended due date of May 15, 2022, is for the college’s fiscal year ending June 30, 2021, and includes compensation amounts spanning January 1, 2020, through December 31, 2020.
Reported in Form 990-T
Certain activities at the college generate unrelated business income, which is permitted but must be appropriately disclosed on Form 990-T. Activities the college generally reports on Form 990-T include:
Income or loss from unrelated business activities generated by the college’s passive investments in limited partnerships held in the endowment portfolio of investments. These investments are complex investment vehicles that, while generating significant return on investment for the endowment, also spin off a small amount of unrelated business gain or loss.
Conference and Event Services: Sales of event space, catering and residence hall rental space to external organizations for purposes unrelated to the college’s primary mission.
Tax exemption for educational institutions like Ithaca College requires the complete disclosure of its financial activities every year. It is the college’s duty to the IRS to provide all of the information required on Forms 990 and 990-T, and it is the college’s commitment to the public to do so with the highest level of transparency.