Most nonprofit organizations are required to annually file a Form 990 with the IRS. The filing is tied to the nonprofit’s fiscal year end and is due on the fifteenth day of the fifth month after the fiscal year ends. For organizations with calendar fiscal years, the filing deadline is May 15. For fiscal years ending June 30, the deadline is November 15. Under normal circumstances, nonprofits may seek a six-month extension for Form 990 filings by filing Form 8868. This year is not normal, to say the least.
IRS Form 990 Automatic Filing Extension
On March 13, 2020, President Trump issued an emergency declaration in response to COVID-19. The declaration instructed the IRS to extend deadlines to provide relief for taxpayers during this unprecedented crisis. On March 21, 2020, the IRS issued Notice 2020-18, Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic, addressing a number of individual and business tax filings.[i] On April 9, 2020, the IRS issued Notice 2020-23 to further expand the filing extensions.[ii]
Specifically, Notice 2020-23 automatically extends the tax deadline for 990 filings to July 15, 2020, for all tax returns that were originally due between April 1, 2020 and July 14, 2020. Nonprofits do not have to do anything to take advantage of the automatic extension. The notice expressly includes IRS Form 990-PF filings for private foundations, and it implicitly includes IRS Form 990 filings for all other reporting tax-exempt organizations through prior IRS Rev. Proc. 2018-58. That IRS Revenue Procedure instructs that filing Form 990 constitutes a “time-sensitive act” that may be postponed in the event of “a federally declared disaster.”[iii]
In effect, Notice 2020-23 provides nonprofits with an extended time to submit Form 990 filings, or, alternatively, an extended time to submit Form 8868 for a six-month extension.
IRS Form 8868 Six-Month Extensions
An automatic six-month extension is available through the IRS Form 8868, provided that such Form 8868 is filed before the filing deadline. Accordingly, for 990s now due by July 15, 2020, an IRS Form 8868 extension should be submitted on or before July 15, 2020. Note that the extension date may not go beyond the original statutory or regulatory extension date (i.e., six months from the original May 15, 2020 due date).
Filing Extensions Scenarios
The following scenarios describe how the COVID-19 and Form 8868 extensions work for two different fiscal year endings.
December 31, 2019
If a nonprofit’s fiscal year ended on December 31, 2019, then the original filing due date for Form 990 was May 15, 2020 (i.e., 4 ½ months later). That deadline is now automatically extended to July 15, 2020. The nonprofit thus now has until July 15, 2020 to file its Form 990 return. Alternatively, the nonprofit may submit Form 8868 for a six-month extension, by July 15, 2020. The 990 filing deadline will then be November 15, 2020 (i.e., six months after May 15, 2020).
June 30, 2020
If a nonprofit’s fiscal year will end on June 30, 2020, then the original filing due date for Form 990 is November 15, 2020 (i.e., 4 ½ months later). There is no automatic extension for COVID-19, since the filing date is after July 15, 2020. The nonprofit thus has until November 15, 2020 to either file its Form 990 return or to submit Form 8868 for a six-month extension. With an extension, the filing deadline will be May 15, 2020 (i.e., six months after the original November 15, 2020 filing deadline).
State Charitable Solicitation Renewals
Please note that states’ charitable solicitation regulators have not, thus far, uniformly provided any similar relief for state registration and renewals, which typically require a copy of the Form 990 filing. We are aware of only a few states that have issued auto-extensions for charitable solicitation registrations – namely Colorado, New York, Ohio, and Pennsylvania.
Thus, while Notice 2020-23 provides an extension with the IRS, a charity engaged in charitable fundraising in various states and registered with those states’ regulators should likely aim for meeting the initial filing deadline. This is because states’ extension procedures for charitable solicitation renewals are a veritable boondoggle, with some states not granting any extensions and others requiring specific financial draft reports in order to remain in compliance. As a result, a charity is typically better off from a financial and administrative standpoint if it can avoid these additional state extension hurdles.
If a charity has a question regarding a specific state’s filing deadline, nonprofits should visit state websites for the latest updates. Each state has a government authority, like the Secretary of State or the Attorney General, that handles charitable solicitation registrations. If the registration is a renewal, then a nonprofit can simply review prior submissions for the name of the appropriate state authority.