April marks a significant period for nonprofits, not only as a precursor to the May 15 deadline for 990 filings but also as a month punctuated with critical deadlines of its own.
Important Updates for the May 15 Filing Season
Due to significant IRS staffing cuts, nonprofits should expect delays in processing final returns and responding to IRS notices. To minimize the risk of delays or IRS errors, it is strongly recommended that organizations submit their filings early—ideally one to two weeks before the May 15 deadline. Furthermore, hold times with the IRS will be longer and phone time with the IRS will be limited since they have limited individuals available to take calls at their call centers.
Additionally, nonprofits filing Form 990-T due to unrelated business income must pay any taxes owed by May 15, even if they file for an extension. Organizations should ensure their income and expense data for their unrelated business activity is current and submitted to their tax accountant before the extension is due so they can accurately calculate tax liability and avoid late payment penalties, which—while typically minimal—are still best avoided.
Key Takeaways:
- File early to avoid IRS delays
- Pay 990-T tax liability by May 15 (even if extending)
- File state personal property returns or other filings by April 15
- Don’t forget FBAR if applicable
The Full Story
The following list of April tax deadlines highlights filings that, while might not be as well-known as the 990, are equally important for many organizations. This includes the necessity of addressing foreign bank accounts, political activity expenditures, unrelated business income tax, personal property taxes in specific states, and obligations related to for-profit subsidiaries.
FinCen114 filing: The Financial Crimes Enforcement Network (FinCEN) Form 114, also known as the Report of Foreign Bank and Financial Accounts (FBAR), is required to be filed by U.S. organizations that have a financial interest in or signature authority over foreign financial accounts. The aggregate value of these accounts must exceed $10,000 at any time during the calendar year.
Deadline: April 15, however, if an organization is unable to file by this date, an automatic extension is available, which extends the deadline to October 15. That said, if an organization is filing this return after April 15 but before October 15, you must give a reason for extending when you do end up filing.
1120-POL: This filing is required when an organization not exempt under 501(c)(3) incurs political activities expenditures and has net investment income of greater than $100. Net investment income includes interest revenue, dividends revenue, and realized gains. When filing the 1120-POL, the lower of political activities expenditures or net investment income would be taxable to the organization.
Deadline: The initial filing deadline is April 15, but an extension can be filed by this date, which extends the deadline to October 15. Even though the return can be extended, the tax due with the 1120-POL must be paid with the extension by April 15.
Note: An accompanying state corporate return would need to be filed with the 1120-POL and the same rules for the extension and tax payment date apply to the state as it does to the federal. Please consult with your tax advisor on this matter. Your tax advisor can help you determine if your organization is required to take care of these filings.
1st Quarter estimated payments for organizations with unrelated business income: Organizations that have gross unrelated business income of greater than $1,000 are required to file the Form 990-T to report revenue and expenses for the unrelated activity and pay any income tax that would be due. For any of these organizations that normally calculate more than $500 tax due on their 990-T are required to pay the tax quarterly as opposed to paying with the extension or when filing the return.
Deadline: For calendar year-end organizations, the 1st quarter estimated tax is due April 15. The rules can be complicated when it comes to requirements for making estimated tax payments, so please consult with your tax advisor on this matter.
Personal Property tax returns or other state filings: Nonprofits that are registered in various states outside of where they are located may have filing requirements such as personal property returns or charitable solicitation filings or state annual reports.
Deadline: April 15 but can vary depending on the state..Various states have certain filings that are due April 15th regardless of year end, such as personal property returns, annual reports, or charitable registration renewals. The deadlines vary depending on the state. Please check each state’s secretary of state or attorney general website for more information on these deadlines.
Organizations with for-profit subsidiaries: Calendar-year exempt organizations that own a C Corporation as a for-profit subsidiary need to file a Form 1120 and state return for that subsidiary. (For S Corporations filing Form 1120S, that deadline was March 15.)
Deadline: The 1120 and state return are due April 15 but can be extended to October 15. Even though the return can be extended, the tax due with the 1120 must be paid with the extension by April 15. Same goes for the corresponding state tax return. Please consult with your tax advisor on this matter. Your tax advisor can help you determine if your organization is required to take care of these filings.
Have questions about your organization’s filings or payment deadlines?
The Han Group team is here to help—contact us to ensure your filings are on time and penalty-free.
