The 501 S(c)ene

The latest view on not-for-profit accounting issues

Changes to the Form 990 extension process

Form 990 extension, nonprofit, accounting, IRS, taxThe due date for exempt organizations to file their Form 990 returns is the 15th day of the 5th month after the organization’s year-end. With the May 15th due date for organizations having a calendar year-end this week, you may have filed for an extension. If you did, you may have noticed that the 990 extensions have changed. Previously, two consecutive extensions were available. By filing Form 8868, an organization could file for an initial automatic 3-month extension. Afterward, a second 3-month Form 990 extension could be requested (but not automatically granted by the IRS).

Congress passed the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” in July 2015. While you may read the title and assume that the bill just addresses highway funding, H.R. 3236 also included changes to a variety of tax return due dates, including due dates for Form 990s. For organizations that need additional time to file, the two consecutive extensions have been combined to create a single 6-month extension. The IRS has updated Form 8868, and taxpayers can utilize the new extension for taxable years beginning after December 31, 2015, or in other words, beginning with the deadline of May 15, 2017. This is expected to result in fewer extension forms being filed, fewer missed Form 990 extension deadlines, and a decreased burden on both tax preparers and the IRS.

Paul Biggs, CPA