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IRS Requiring Many Tax-Exempt Organizations to File Information Returns by May 16, 2022

IRS Requiring Many Tax-Exempt Organizations to File Information Returns by May 16, 2022

Even though organizations like charities and foundations may be tax-exempt, the IRS still requires them to file certain information every year, and this year the deadline is May 16.

Here are the forms they may need to file, depending on the size and type of organization:

    • Form 990, Return of Organization Exempt from Income Tax
    • Form 990-EZ, Short Form Return of Organization Exempt from Income Tax
    • Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation
    • Form 990-N, Electronic Notice, e-Postcard, for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ
    • Form 990-T, Exempt Organization Business Income Tax Return
    • Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code

Tax-exempt organizations must file their forms electronically. E-filing reduces the processing itme and will make compliance with reporting requirements easier for you.

Here are a few things organizations should know about filing:

    • Organizations can e-file most returns through an IRS Authorized e-File Provider.
    • However, organizations filing Form 990-N must e-file through the Form 990-N, e-Postcard, page on IRS.gov.
    • The IRS will reject incomplete or incorrect returns. Organizations should check that they’re using the right return, have fully completed it and don’t have missing schedules.
    • The IRS has a series of pre-recorded online workshops for exempt organizations. For organizations filling out one of the Form 990 series, the Form 990 Overview Course may be helpful.

Extension of time to file
If an organization can’t make the May deadline, they can request a 6-month automatic extension by filing Form 8868, Application for Extension of Time to File an Exempt Organization Return. This extension to file isn’t an extension to pay any tax owed. Organizations can e-file Form 8868 for faster processing.

 

 

CARES Act Allows Employee Retention Credit for Businesses Financially Impacted by Covid-19

CARES Act Allows Employee Retention Credit for Businesses Financially Impacted by Covid-19

Under the CARES Act, enacted March 27, 2020, the Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees.

The CARES Act allowed these credits for wages paid after March 12, 2020, and before January 1, 2021. See Notice 2021-20 PDF.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), enacted December 27, 2020, amended and extended the employee retention credit (and the availability of certain advance payments of the tax credits) under the CARES Act for the first and second calendar quarters of 2021.

Was your business financially impacted by COVID-19? You could be elgibile for a employee retention credit against certain employement taxes.

Like the credit for 2020 under the CARES Act, you can get immediate access to the credit by reducing the employment tax deposits you are otherwise required to make. If your employment tax deposits are not sufficient to cover the credit, you may be able to request an advance payment from the IRS. See Notice 2021-23 PDF.

The ARP modified and extended the employee retention credit (and the availability of certain advance payments of the tax credits) for the third and fourth quarters of 2021. See Notice 2021-24 PDF for guidance on the ability to reduce deposits and, in some cases, request advances for the employee retention credit through December 31, 2021.