Extension Considerations for Form 990 and 990-T Filings

In response to President Trump’s declaration of national emergency in response to the rapid spread of COVID-19, the Department of The Treasury (DOT) and IRS issued Notice 2020-18 (The Notice) on March 18 for delayed tax filings.

The DOT and IRS subsequently released a follow-up list of questions and answers on March 24 to eliminate any confusion created by The Notice.

As many of you are, by now, aware, the due date for filing both individual tax returns and paying tax liability up to $1,000,000 is now July 15, 2020. The Notice also addressed the filing of other income tax returns originally due on April 15, 2020. To receive the filing and payment extension under The Notice, three things are required:

1. The original due date of the return to be filed must be April 15.
2. The return must be for the 2019 tax year.
3. The form to be filed must be a tax return.

Form 990 Filing Extension Considerations

Unfortunately, for tax-exempt organizations, Form 990 is considered to be an information return rather than a tax return under the Internal Revenue Code and Treasury Regulations. Thus tax-exempt organizations filing Form 990 do not meet all three requirements for delayed filing. It is possible, however, that the May 15 due date for 2019 Form 990s may be extended beyond May 15 by a subsequent notice. Until then, we recommend that you continue to operate under the current May 15 filing date. We will continue to monitor this situation and update you as new information is available.

Form 990-T Filing Extension Considerations

Organizations and qualified retirement plans filing Form 990-T, which is considered to be an income tax return, will only be subject to the filer of the Form 990-T delayed filing and payment provisions of The Notice under one of two circumstances. These two circumstances for delayed filing of Form 990-T are:

1. The organization is a trust, or the organization is a corporation with a tax year of fewer than twelve months ending in November 2019.
2. Entities with a pension plan that will file a 2019 Form 990-T, originally due on April 15, are eligible for the federal deferral under The Notice. Nonprofit organizations with a November 30 year-end that will file a short-year 2019 Form 990-T also qualify for the federal deferral under The Notice.

For additional insights to help you and your organization during this challenging time, visit Withum’s COVID-19 Resource Center.

Authors: Richard Ruvelson | rruvelson@withum.com and Terry Mullen | tmullen@withum.com