A Comprehensive Guide for Nonprofit Organizations and Tax-Exempt Entities

If you're involved with a nonprofit organization, charity, private foundation, or other tax-exempt entity, you know that filing annual returns with the IRS is a critical responsibility. But what happens when you need more time to gather information, finalize your books, or complete your return? That's where Form 8868 comes in—a straightforward form that can buy your organization valuable additional time to file properly and avoid costly penalties.

What the Form Is For

Form 8868, officially titled "Application for Automatic Extension of Time To File an Exempt Organization Return," is the IRS's way of giving tax-exempt organizations breathing room when filing deadlines approach. Think of it as a safety valve that prevents your organization from rushing through important tax filings or facing penalties for late submission. IRS.gov

This form requests an automatic 6-month extension of time to file various exempt organization returns and certain excise tax returns. The key word here is "automatic"—if you complete the form correctly, file it on time, and pay any taxes owed, the IRS will grant your extension without requiring additional approval or justification.

Form 8868 can be used to extend the filing deadline for numerous returns, including:

• Form 990 (Return of Organization Exempt from Income Tax) and Form 990-EZ (Short Form)
• Form 990-PF (Return of Private Foundation)
• Form 990-T (Exempt Organization Business Income Tax Return)
• Form 990-BL (Information and Initial Excise Tax Return for Black Lung Benefit Trusts)
• Form 4720 (Return of Certain Excise Taxes on Charities)
• Form 5227 (Split-Interest Trust Information Return)
• Form 1041-A (U.S. Information Return Trust Accumulation of Charitable Amounts)
• Form 6069 (Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust)
• Form 8870 (Information Return for Transfers Associated with Certain Personal Benefit Contracts—but this one must be filed on paper)

It's crucial to understand that Form 8868 only extends your time to file the return, not your time to pay any taxes owed. Any balance due must still be paid by the original deadline to avoid interest charges and penalties. IRS.gov

When You’d Use Form 8868 (Late/Amended)

When to Use Form 8868

The most common scenario for using Form 8868 is when your organization realizes it cannot complete its annual return by the original due date. For most tax-exempt organizations operating on a calendar year, Form 990 or 990-EZ is typically due on May 15 (the 15th day of the 5th month after the tax year ends). If you need more time, you must file Form 8868 by that same May 15 deadline to extend your filing date to November 15 (six months later).

Organizations file extensions for many legitimate reasons:

• Waiting for final financial statements from your accountant
• Collecting information from multiple departments or chapters
• Dealing with staff transitions or turnover
• Managing complex transactions that require additional documentation
• Ensuring accuracy rather than rushing to meet an arbitrary deadline

Important Change in 2020

Prior to 2020, organizations needed to file for an initial 3-month extension and then potentially request an additional 3-month extension. However, starting with the 2020 tax year, the IRS simplified this process by offering a single automatic 6-month extension. This means fewer forms to file and less administrative burden for your organization.

What About Late or Amended Returns?

Form 8868 cannot help if you've already missed the original filing deadline. A late-filed Form 8868 (submitted after the original due date) is not effective and will not protect you from late-filing penalties. If you've missed your deadline, you should file your return as soon as possible and be prepared to explain any reasonable cause for the delay directly to the IRS.

Similarly, Form 8868 does not apply to amended returns. If you've already filed your return and need to correct or amend it, you would file an amended version of your original return (such as Form 990-X for amended Form 990), not an extension request.

Special Note: You cannot use Form 8868 to extend the filing deadline for Form 990-N (the e-Postcard for small organizations with gross receipts under $50,000). Form 990-N has its own rules and no extension is available. IRS.gov

Key Rules for 2020

The 2020 version of Form 8868 (revised January 2020) introduced several important rules and clarifications:

Automatic 6-Month Extension

The most significant change was the move to a single automatic 6-month extension rather than the previous two-step process. This streamlined approach reduces paperwork and administrative burden.

One Extension Per Return

An organization is only allowed one extension of 6 months for any given tax year return. You cannot request multiple extensions or extend beyond the 6-month period.

Separate Form for Each Return

If your organization needs to file multiple types of returns (for example, both Form 990 and Form 4720), you must file a separate Form 8868 for each return. The IRS does not accept "blanket" extension requests covering multiple return types.

Electronic Filing Strongly Encouraged

While paper filing is permitted, the IRS strongly encourages electronic filing of Form 8868. E-filing is faster, reduces errors, and provides immediate confirmation that your extension request has been received. Most returns covered by Form 8868 can be e-filed except Form 8870, which must be submitted in paper format.

Payment Requirements

This is critical: extending your filing deadline does not extend your payment deadline. If your organization owes taxes, you must pay at least 90% of the total tax liability by the original due date to avoid late payment penalties. Organizations must use the Electronic Federal Tax Payment System (EFTPS) for federal tax deposits, though a special exception exists for small private foundations with tax liabilities under $500, who may pay by check.

No Signature Required

Unlike many tax forms, Form 8868 does not require a signature, simplifying the filing process.

Return Code System

The 2020 form uses a "Return Code" system where you enter a specific two-digit code (01 through 12) indicating which type of return you're extending. This helps the IRS process your extension more efficiently. IRS.gov

Step-by-Step (High Level)

Filing Form 8868 is relatively straightforward if you follow these steps:

Step 1: Gather Essential Information

Before starting the form, collect your organization's:

• Legal name and address
• Employer Identification Number (EIN)
• Tax year information (beginning and ending dates)
• Estimated tax liability (if any)
• Amount of any payments already made

Step 2: Complete the Header Section

Enter your organization's name, EIN, address, and the name/phone number of the person who maintains your books and records. If your organization has no U.S. office or is filing a group return, check the appropriate boxes.

Step 3: Select Your Return Code

In the Return Code box, enter the two-digit code for the specific return you're extending:

• 01 for Form 990 or 990-EZ
• 02 for Form 990-BL
• 03 for Form 4720 (individual)
• 04 for Form 990-PF
• 05 for Form 990-T (section 401(a) or 408(a) trust)
• And so on for other return types

Step 4: Complete Lines 1–3

• Line 1: Enter the extended due date (6 months from your original deadline) and specify your tax year
• Line 2: Check boxes only if this is an initial return, final return, or you're changing your accounting period
• Lines 3a–3c: Calculate and enter any tentative tax, credits, and balance due

Step 5: Make Payment (if applicable)

If you owe taxes, pay the balance due by the original deadline using EFTPS or, for qualifying small foundations, by check. Write your organization's name, EIN, "Form 8868," and the tax year on your check.

Step 6: File the Form

Submit Form 8868 by the original due date of your return either:

• Electronically through the IRS e-file system (recommended), or
• By mail to: Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0045

Step 7: Keep Your Records

Retain a copy of the filed Form 8868 and proof of filing/payment for your organization's records. This documentation proves you requested the extension if any questions arise later. IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Filing After the Original Due Date

This is the most critical error. An extension request filed even one day after the original deadline is invalid and provides no protection against late-filing penalties.
Solution: Mark your calendar well in advance and set up reminder systems. Consider filing your extension 2–3 weeks before the deadline to allow for any unexpected delays.

Mistake #2: Not Paying Taxes Due

Many organizations mistakenly believe that filing an extension also extends their time to pay taxes. It doesn't. Failing to pay at least 90% of your tax liability by the original deadline results in interest charges and potential penalties.
Solution: Carefully estimate your tax liability and make payment with your extension request. It's better to overpay slightly than to underpay and face penalties.

Mistake #3: Using One Extension for Multiple Returns

If your organization needs to file both Form 990 and Form 4720, you cannot use a single Form 8868 to extend both.
Solution: File a separate Form 8868 for each return type, using the correct Return Code for each.

Mistake #4: Incorrect Return Code

Entering the wrong Return Code can cause processing delays and confusion about which return is being extended.
Solution: Double-check the Return Code table on the form and ensure you're using the correct code for your specific return type.

Mistake #5: Assuming Form 990-N Can Be Extended

Small organizations filing Form 990-N (e-Postcard) cannot use Form 8868 for an extension.
Solution: If you normally file Form 990-N but might miss the deadline, file Form 990-EZ instead, which can be extended.

Mistake #6: Incomplete or Inaccurate Information

Missing EINs, incorrect tax year dates, or mathematical errors in the tax calculation sections can cause your extension to be rejected.
Solution: Have a second person review the completed form before filing. Use the IRS's e-file system, which includes built-in error checking.

Mistake #7: Not Keeping Documentation

Without proof that you filed your extension on time, you may have difficulty proving you met the deadline if the IRS questions your filing.
Solution: Keep confirmation receipts from e-filing or certified mail receipts from paper filing, along with a copy of the completed form. IRS.gov

What Happens After You File

Immediate Effect

Your extension is automatic—meaning it takes effect immediately upon proper filing. You don't need to wait for IRS approval or receive a confirmation letter. As long as you filed correctly and on time, you have an additional 6 months to submit your return.

No IRS Acknowledgment (Usually)

Unlike some IRS forms, you typically won't receive a formal approval letter for your extension. If you e-filed, you'll receive an electronic acknowledgment that your submission was accepted, which serves as your proof. Paper filers should keep their mailed copy and postal receipt as documentation.

Your New Filing Deadline

Count six months from your original due date to determine your extended deadline. For calendar-year organizations whose Form 990 was originally due May 15, the extended deadline becomes November 15.

Continue Working on Your Return

The extension gives you breathing room, but don't wait until the last minute. Use the extra time productively to gather information, verify accuracy, and prepare a complete, correct return.

Pay Attention to Other Deadlines

Remember that some deadlines are not extended. For example, if your organization must make estimated tax payments, those deadlines remain unchanged regardless of your filing extension.

Potential for Audit

Filing an extension does not increase or decrease your organization's likelihood of being audited. The IRS selects returns for examination based on various factors, but requesting an extension is not one of them.

If You Still Can't File

What if you reach your extended deadline and still aren't ready? Unfortunately, you cannot request a second extension. At that point, you must either file an incomplete return and amend it later or file late and potentially face penalties. Neither option is ideal, so organizations should use the full 6-month period wisely.

Potential Penalties if You Don't File

If you fail to file by the extended deadline, the IRS may impose late-filing penalties. For Form 990 series returns, the penalty can be $20 per day for organizations with gross receipts under $1 million (capped at the lesser of $10,000 or 5% of gross receipts), or $105 per day for larger organizations (capped at $52,500). These penalties underscore the importance of meeting your extended deadline. IRS.gov

FAQs

Q1: Does filing Form 8868 cost anything?

No, there is no fee to file Form 8868. The extension request itself is free, though you may need to pay any taxes owed by the original deadline to avoid penalties and interest.

Q2: Can I file Form 8868 if I don't owe any taxes?

Yes, absolutely. Even if your organization has no tax liability, you should still complete all sections of Form 8868, entering "$0" or "-0-" in the tax calculation sections. The extension is available to all eligible organizations regardless of whether they owe taxes.

Q3: What's the difference between an extension to file and an extension to pay?

This is crucial to understand: Form 8868 only extends your deadline to file your return—it does not extend the deadline to pay any taxes owed. Taxes must be paid by the original due date to avoid interest and potential penalties, even if you've received a filing extension.

Q4: I'm a small nonprofit filing Form 990-N. Can I use Form 8868?

No. Form 990-N (the e-Postcard for organizations with annual gross receipts normally $50,000 or less) cannot be extended using Form 8868. If you think you'll miss the Form 990-N deadline, consider filing Form 990-EZ instead, which can be extended and provides more detailed information anyway.

Q5: Our fiscal year ends on June 30. When are our deadlines?

Your original filing deadline would be November 15 (the 15th day of the 5th month after June 30). You would need to file Form 8868 by November 15 to extend your deadline to May 15 of the following year (six months later).

Q6: Can we file Form 8868 electronically, or must it be mailed?

The IRS strongly encourages electronic filing, and most organizations can e-file Form 8868 through the IRS's e-file system for tax-exempt organizations. The only exception is Form 8870 extensions, which must be filed on paper. E-filing is faster, more secure, and provides immediate confirmation of receipt.

Q7: We filed Form 8868 but still didn't finish our return by the extended deadline. What should we do?

You cannot request a second extension beyond the 6-month period. At this point, you should file your return as soon as possible, even if it's late, and be prepared to face potential late-filing penalties. If you have a reasonable cause for the delay (such as a natural disaster, serious illness, or unavoidable circumstances), you may be able to request penalty relief by submitting a written explanation to the IRS, though this is not guaranteed. The best approach is to use the full 6-month extension period wisely and prioritize completing your return before the extended deadline expires. IRS.gov

Conclusion

Form 8868 is a valuable tool for tax-exempt organizations that need additional time to prepare accurate, complete annual returns. By understanding when to use it, how to file it correctly, and what happens afterward, your organization can avoid unnecessary penalties while ensuring compliance with IRS requirements. Remember: the extension is automatic if you file correctly and on time, but it only extends your filing deadline—not your payment deadline. When in doubt, consult with a qualified tax professional who specializes in nonprofit taxation to ensure your organization meets all its filing obligations.

For more information and to access the current version of Form 8868, visit the official IRS website at www.irs.gov/Form8868.

Note: This summary focuses on the 2020 version of Form 8868. While the fundamental principles remain consistent across years, always verify current requirements and use the most recent form version available on IRS.gov when filing your extension request.

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