How Nonprofits Get Tax Extensions

Isn’t it funny how tax season can sneak up on you? Well, maybe it’s not funny, it can be stressful. One minute you’re enjoying the spring weather and the next minute you could be struggling to gather all of your information to get ready to file. If you’re a tax-exempt organization, don’t worry you can skip the headaches and the hassle by going to ExpressExtension to get more time to file.

Exempt Organization Extension Form 8868

A tax-exempt organization is a nonprofit organization that is exempt from federal income taxes that meet the requirements under sections 501 through 505. The most common types of nonprofit organizations include charities, religious groups, and educational groups. However, they can also include groups established for preventing animal and child cruelty, testing for public safety, literary groups, and more.

Every year tax exempt organizations have to file a Form 990 or a return of organization exempt from income tax by May 15th. The purpose of the form is to provide the public with information about the organization and so that the IRS can make sure that these groups aren’t abusing their tax-exempt status.

The only problem is that sometimes nonprofit organizations can’t meet that deadline. There are a number of various reasons for needing an extension from simply being too busy to file right now or due to just needing a little more time to gather the required information to file.

Rather than facing the penalties for failing to file their 990 form, tax-exempt organizations can quickly and easily get an extension with IRS Form 8868, which is the form used by charities, nonprofits, and other tax-exempt groups to apply for an additional 6 months to file their return.

The process is incredibly quick and easy. By spending a few minutes e-filing form 8868 by the May 15th deadline then you’ll have your extension approved almost instantly. Form 8868 is even automatic, meaning you don’t have to provide the IRS with a valid reason for needing an extension. 

If you know a little about this tax extension you may be a little confused, thinking that this extension is supposed to be only for 3-months. That’s because it used to be, however, the IRS recently combined the 3-month automatic extension with the 3-month nonautomatic extension to create, drum roll please, one automatic 6-month extension.

Just be sure to keep in mind that IRS Form 8868 can’t be used to extend the due date of Form 990-N (e-postcard) and IRS Form 8870 can not be e-filed with either Part 1 or Part 2. Although, we can generate Form 8870 in your account, where you can then print and mail it.

The penalties for filing late or for not filing a 990 at all include a fee of $20 per day for every day that the return is late and the maximum penalty is either $10K or 5% of the organization’s gross receipts, depending on which is less. For an organization with gross receipts of over 1,000,000 the daily penalty is $100 per day for a maximum penalty of $50k.

That being said, remember that e-filing for an extension is really easy! All you need is your organization’s name, address, EIN/Tax-ID, tax year period, and which 990 for your typically follow. Then create your free ExpressExtensions account and follow our step-by-step guide to quickly complete Form 8868.

We Can Help

Got any questions? Well, our dedicated support team here at ExpressExtension is here to answer them. Call us anytime Monday – Friday from 9 AM to 6 PM at 803.514.5155, reach out via live chat, or take advantage of our 24/7 email support at [email protected].