2023 Form 990 includes changes affecting reporting by supporting organizations and hospitals

In brief

What happened?

Comparing the 2023 Form 990, Return of Organization Exempt from Income Tax, to the 2022 Form 990 shows relatively few modifications other than minor stylistic changes and updated references to IRS guidance. Notable changes include:  

• Supporting organizations whose supported organizations are not all named in their governing documents must provide an additional explanation in response to Schedule A, Part I, Line 12g, Column (iv).    
• The instructions in Schedule H for Worksheet 4, Community Health Improvement Services and Community Benefit Operations (Part I, Line 7e) clarify that an activity that is required for licensure or accreditation may be reported in certain circumstances.  

PwC is pleased to make available our annotated versions of the 2023 Form 990, accompanying schedules, and instructions. The documents include PwC’s highlights of and comments on key changes for 2023. The documents are searchable and include bookmarks to assist with navigation.  

Action to consider

Failure to timely file a complete and accurate Form 990 can have adverse impacts, including penalties and loss of tax-exempt status. As a result, organizations should take steps designed to avoid nonconforming or incomplete responses on Form 990 that could result in additional IRS scrutiny.

Schedule H – Hospitals  

Worksheet 4 in the instructions to Schedule H is used by hospitals to calculate the net cost of community health improvement services and community benefit operations for the purpose of determining the hospital’s net community benefit expense and community benefit percentage in Schedule H, Part I, Line 7(e). In general, activities and programs may not be reported as community benefit expenses if they are provided primarily for marketing purposes or if they are more beneficial to the hospital organization than to the community. Accordingly, the instructions provide that activities and programs required for licensing or accreditation generally are not reportable as community benefit activities. The 2023 Form 990 instructions clarify that an activity or program required for accreditation or licensing nonetheless may be reported if the activity is conducted when responding to a community health need, enhancing public health, or relieving the burden of government to improve health.