Charities and Non-Profits: Tax Extension Rules

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If you run a charity or non-profit organization, and you are classified as “tax exempt” under Section 501(a) of the Internal Revenue Code, you are probably familiar with IRS Form 990.

Form 990: Return of Organization Exempt from Income Tax

This form is used by charities and non-profits to report activities to the IRS each year. Form 990 has 12 pages and 12 parts, and requires the organization to provide details about donations, management, and pay structure.

You must file Form 990 for a tax-exempt organization if either of the following apply:

• The organization’s gross receipts are $200,000 or more for the year, or

• The organization’s total assets are $500,000 or more for the year

Form 990 is due by the 15th day of the 5th month following the close of the tax year (May 15 for calendar year taxpayers).

It is quite common for non-profit groups to be overwhelmed and understaffed, which means that getting a tax extension can really help. With extra time to file, you can make sure that your tax return is completed accurately and in compliance with the law. To get a tax extension for Form 990, use Form 8868.

Form 8868: Application for Extension of Time to File an Exempt Organization Return

If you run a tax-exempt organization — whether you’re a director, manager, or administrator — you may want to look at requesting a Federal tax extension. Charities and non-profit organizations can apply for a tax extension using Form 8868. There are two types of extensions that can be obtained with Form 8868:

• An automatic 3-month tax extension (6 months for corporations filing Form 990-T)

• An additional (not automatic) 3-month tax extension

To request the automatic 3-month extension, only fill out Part I of Form 8868. As long as you properly complete and file Form 8868 by the deadline, you will be granted the automatic extension. To apply for the additional (not automatic) 3-month extension, only fill out Part II of Form 8868. Note that you cannot apply for both the automatic and additional tax extensions at the same time.

As you go over Form 8868, you’ll notice that the IRS requires you to provide a reason for needing the tax extension. This requirement is different than the rules for requesting a personal extension (Form 4868) or a business extension (Form 7004). Also remember that you must still pay any tax balance due by the original deadline.

For more information about tax-exempt organizations, see IRS Publication 557 (Tax-Exempt Status for Your Organization) and IRS Publication 4221-NC (Compliance Guide for Tax-Exempt Organizations). If you have any questions, feel free to contact our Support Team.