A Complete Guide for Tax-Exempt Organizations

What the Form Is For

Form 8868 is the IRS document that tax-exempt organizations use to request extra time to file their annual returns. Think of it as a "permission slip" that gives your nonprofit, foundation, or other exempt organization more breathing room to complete complex tax paperwork without facing penalties.

The 2017 version of Form 8868 marked an important change: it now provides an automatic 6-month extension in a single filing, replacing the previous system that required filing twice (first for 3 months, then for an additional 3 months). This streamlined approach means less paperwork and more efficiency for organizations that need additional time to gather financial information, compile reports, or coordinate with accountants and board members.

The form covers a wide range of returns, including Form 990 (the standard information return for most nonprofits), Form 990-PF (for private foundations), Form 990-T (for unrelated business income tax), and several other specialized forms. Whether you're a small charity, a large foundation, or a trust filing Form 1041-A, Form 8868 is your gateway to avoiding late filing penalties while ensuring you submit accurate, complete information.

When You’d Use Form 8868

When to file Form 8868

You should file this extension request by the original due date of your organization's return. For most tax-exempt organizations filing Form 990 or 990-EZ, this means submitting Form 8868 by the 15th day of the 5th month after your tax year ends. If your organization operates on a calendar year, your Form 990 is typically due May 15th, so you'd need to file Form 8868 by May 15th to get an extension until November 15th.

Important limitation

Form 8868 only extends the time to file your return—it does not extend the time to pay any taxes owed. If your organization owes taxes (such as excise taxes or unrelated business income tax), you must estimate and pay at least 90% of the tax liability by the original due date to avoid penalties, even when requesting an extension.

What Form 8868 cannot do

This form cannot extend the filing deadline for Form 990-N (the e-Postcard for small organizations with gross receipts under $50,000). Organizations that only need to file Form 990-N must submit it by the original deadline—no extensions are available. Additionally, you cannot use Form 8868 to file an amended return; amendments require different procedures.

Critical reminder

If your organization fails to file required returns for three consecutive years, the IRS will automatically revoke your tax-exempt status back to the original filing date. Filing Form 8868 protects you from this "automatic revocation" rule, but only if you actually submit your return before the extended deadline expires.

Key Rules or Details for 2017

The 2017 tax year brought significant improvements to Form 8868 that made life easier for exempt organizations:

Automatic 6-month extension

The most important change in 2017 was the shift to a single, automatic 6-month extension. Previously, organizations could request an initial 3-month extension automatically, but needed to separately apply for an additional 3 months (which wasn't always granted). Now, when you properly complete and file Form 8868, you automatically receive the full 6 months—no questions asked, no follow-up applications required.

Electronic filing strongly encouraged

While you can still mail a paper Form 8868 to the IRS Service Center in Ogden, Utah, the IRS strongly prefers electronic filing. E-filing is faster, provides immediate confirmation, and reduces processing errors. However, there's one exception: Form 8870 extensions must still be submitted on paper.

Return codes system

In 2017, the IRS introduced a "Return Code" system to replace checkboxes on Form 8868. Each type of return has a designated code (01 for Form 990/990-EZ, 04 for Form 990-PF, 07 for Form 990-T corporations, etc.). You simply enter the appropriate two-digit code in the designated box to indicate which return you're extending.

Payment requirements

Organizations that owe tax must still pay by the original due date using the Electronic Federal Tax Payment System (EFTPS), with one small exception: private foundations with less than $500 in Section 4940 investment income tax may pay by check or money order attached to Form 8868.

No blanket extensions

Each return requires a separate Form 8868. If your organization needs to file both Form 990 and Form 990-T, you must submit two separate extension requests with different Return Codes.

Step-by-Step (High Level)

Step 1: Determine if you need an extension

Evaluate whether your organization can realistically complete and file your return by the original due date. Common reasons for needing an extension include waiting for year-end financial statements, coordinating with multiple state filings, undergoing an audit, or experiencing staff transitions.

Step 2: Identify the correct return type and code

Determine which form your organization needs to file (Form 990, 990-EZ, 990-PF, 990-T, etc.) and look up the corresponding Return Code from the chart on Form 8868. Make sure you understand that you need a separate Form 8868 for each different type of return your organization must file.

Step 3: Gather necessary information

You'll need your organization's legal name, Employer Identification Number (EIN), complete mailing address, the name and contact information of the person keeping the books, and the tax year dates. For group returns, you'll also need the Group Exemption Number (GEN).

Step 4: Calculate any tax liability

Complete lines 3a, 3b, and 3c on the form. Line 3a requires you to estimate the tentative tax (less any nonrefundable credits). Line 3b is for refundable credits and estimated tax payments already made. Line 3c shows the balance due. Even if you expect to owe zero tax, you must enter "-0-" on these lines—don't leave them blank.

Step 5: Arrange payment if needed

If line 3c shows a balance due, arrange to pay through EFTPS before the original due date of your return. Remember: the extension gives you more time to file, not more time to pay. Organizations that don't pay at least 90% of their final tax liability by the original due date will face late payment penalties.

Step 6: Submit the form

File Form 8868 electronically through approved e-file providers or mail the paper form to: Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0045. File by the original due date of your return—not a day later.

Step 7: Keep confirmation records

If you e-file, save your electronic confirmation receipt. If you mail the form, consider using certified mail with return receipt requested. These records prove you filed the extension on time if questions arise later.

Common Mistakes and How to Avoid Them

Mistake #1: Confusing "extension to file" with "extension to pay."

Many organizations mistakenly believe that getting an extension to file also gives them more time to pay taxes. This is wrong. Any tax owed must be paid by the original due date, regardless of the extension. Failure to pay triggers interest charges and late payment penalties. Solution: Always estimate your tax liability and pay at least 90% by the original due date, even if you're still preparing the full return.

Mistake #2: Filing Form 8868 after the original due date.

An extension request filed even one day late is invalid, meaning you'll face late filing penalties when you submit your return. Solution: Mark your calendar with the original due date well in advance. Set internal deadlines several weeks earlier to allow time for any complications in preparing the extension.

Mistake #3: Leaving lines 3a, 3b, and 3c blank.

The IRS requires all filers to complete these lines, even if you don't owe any tax. Blank lines can cause processing delays or rejection of your extension. Solution: If you don't expect to owe tax, enter "-0-" on all three lines. Don't leave anything blank.

Mistake #4: Using Form 8868 for Form 990-N.

Small organizations that only file the e-Postcard (Form 990-N) cannot get an extension. Filing Form 8868 won't help you. Solution: If your organization's gross receipts are normally $50,000 or less and you only file Form 990-N, make sure you submit it by the original deadline. Consider whether your organization might need to file a full Form 990-EZ instead if circumstances have changed.

Mistake #5: Failing to file a separate form for each return type.

If your organization needs to file multiple returns (such as both Form 990 and Form 990-T), you need a separate Form 8868 for each one, with the correct Return Code for each. Solution: Review all of your organization's filing obligations and submit a separate, properly coded Form 8868 for each required return.

Mistake #6: Not updating your address with the IRS.

Organizations sometimes move or change addresses, and showing a new address on Form 8868 won't update the IRS records. This can lead to missed correspondence. Solution: File Form 8822 (Change of Address) separately to ensure the IRS has your current information.

Mistake #7: Assuming you don't need to file after getting an extension.

Getting an extension doesn't make your filing obligation go away. If you receive an extension but never file your return, you'll still face penalties—and three consecutive years of non-filing will trigger automatic revocation of your exempt status. Solution: Treat the extended deadline as sacred and use the extra time productively to complete an accurate return.

What Happens After You File

Immediate confirmation

If you e-file Form 8868, you'll receive electronic confirmation within minutes that the IRS has accepted your extension request. This confirmation serves as proof that you filed on time. If you mail a paper form, the IRS doesn't send an acknowledgment letter, so you'll want to keep proof of timely mailing.

Automatic approval

Unlike some IRS forms that require review and approval, Form 8868 grants an automatic extension if properly completed and filed by the deadline. You don't need to wait for permission from the IRS to rely on the extension—it takes effect immediately upon proper filing.

New filing deadline

Once your extension is granted, your organization has until the extended due date to file the actual return. For most organizations filing Form 990 or 990-EZ with a May 15th original deadline, the extended deadline becomes November 15th (6 months later). Mark this new deadline clearly and treat it as firm—there are no second extensions.

Interest accrual

If your organization owes tax and didn't pay 100% of it by the original due date, interest will accrue on the unpaid balance from the original due date until you pay. The interest rate is set quarterly by the IRS and compounds daily. Even with a valid extension, you cannot avoid interest charges on late-paid taxes.

Potential penalties

If you paid less than 90% of your final tax liability by the original due date, you may face a late payment penalty of 0.5% per month (up to 25% maximum) on the unpaid balance. However, if you file your return and pay any remaining balance by the extended deadline, and if you paid at least 90% on time, the late payment penalty will be waived.

Filing the actual return

During the extension period, your organization should diligently work to complete the full return. Gather all necessary financial statements, board meeting minutes, program descriptions, and other documentation. When you file the actual return before the extended deadline, make sure it's complete and accurate—the extension doesn't protect you from penalties for filing incomplete or erroneous returns.

No second chances

Remember that you cannot request an additional extension beyond the 6 months. The extended deadline is final. If you fail to file by the extended due date, you'll face late filing penalties, and if this becomes a pattern over three years, you risk automatic revocation of your exempt status.

FAQs

Q1: Does it cost money to file Form 8868?

No, there's no fee to file Form 8868 itself. However, you must pay any estimated taxes owed by the original due date. The IRS doesn't charge anything for processing the extension request.

Q2: Can I file Form 8868 if my organization is already late?

No. Form 8868 must be filed by the original due date of your return. If that date has already passed, filing Form 8868 won't help you avoid late filing penalties. Your only option at that point is to file your actual return as soon as possible and pay any penalties that result. You might be able to request penalty abatement if you have reasonable cause for the late filing.

Q3: What if I filed an extension but then realize I won't need the full 6 months?

That's fine—you can file your actual return any time before the extended deadline. There's no requirement to use the full extension period. Many organizations file extensions "just in case" but end up filing their returns earlier than the extended deadline when they're ready.

Q4: If my organization doesn't owe any taxes, do I still need to worry about payment when filing Form 8868?

You still need to complete lines 3a, 3b, and 3c on the form (entering "-0-" for organizations with no tax liability), but you don't need to make any payment. The form is simply requesting more time to file your information return. However, make sure you truly don't owe any taxes—don't forget about potential unrelated business income tax or excise taxes.

Q5: Can a group of related organizations file one Form 8868 covering all of them?

Yes, if your organizations qualify for group return filing and have a Group Exemption Number (GEN), the central organization can file a single Form 8868 for the entire group. You must enter the GEN on the form and indicate whether the extension applies to the whole group or just part of it. If it's only part of the group, you must attach a list with names and EINs of all organizations included in the extension request.

Q6: What should I do if I already filed Form 8868 but made a mistake on it?

If you discover an error on your Form 8868 (such as the wrong Return Code or an incorrect tax calculation), file a corrected Form 8868 as soon as possible, ideally before the original due date of your return. If the original due date has passed, focus on filing your actual return correctly rather than trying to fix the extension form.

Q7: Does filing Form 8868 increase my chances of being audited?

No. Filing an extension is a routine, normal part of tax compliance for many organizations. The IRS doesn't view extension requests as red flags or use them as audit selection criteria. In fact, filing for an extension and submitting a complete, accurate return is far better than rushing to file by the original deadline and making errors that could trigger IRS scrutiny.

Source: All information in this guide comes directly from IRS Form 8868 (Rev. January 2017) and its official instructions, available at IRS.gov.

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