Non-profit Tax

What issues will the ECFA Commission address?

Sen. Charles Grassley has asked ECFA to lead an independent, private sector commission to provide input on some of the major accountability and policy issues affecting the religious nonprofit community, particularly churches. Previous post here.  ECFA’s press release here.

Dan Williams, of PSK, an accounting firm in Arlington, Texas, has some comments at Faith-Based Accounting.

In a webinar on January 14, Michael Batts, CPA and Dan Busby, CPA and President of ECFA, gave background on the Commission and what it will be addressing.

Here are a few of the issues on the commission’s plate:

(more…)

Jim Ulvog

Small Nonprofits claim health care tax credit on Form 8941

The IRS has announced that nonprofits may claim the health care tax credit by filing a Form 990-T and attaching Form 8941.

The IRS has a background article on the credit for nonprofit organizations.  They have a superb FAQ that provides a lot of details.  The DRAFT 8941 is available – remember is is a preliminary draft so we can get an idea what the form will look like.  For a general overview of the health care credit for NPOs, see my previous post.

Jim Ulvog

Expanded 1099 reporting starts in 2012

(See this post for update – legislation repealed!)

Reporting requirements for 1099s will soon expand dramatically.  From the Journal of Accountancy: “(b)eginning Jan. 1, 2012, virtually all payments by a trade or business aggregating $600 or more to any single vendor during any calendar year will have to be reported at the end of each calendar year to the vendor and to the IRS on Form 1099. Vendors include almost anyone a trade or business pays in the course of doing business, other than its employees whose compensation is already reported on Forms W-2.” – the full article is available online. (more…)

Jim Ulvog

Time is running out for tiny NPOs to file a 990-N before they loose tax-exempt status

Following is from an IRS press release on September 22:  “A few years ago, Congress passed a law requiring all tax-exempt organizations, even the smallest ones, to file an annual return with the Internal Revenue Service. Any organization that does not file for three consecutive years automatically loses its federal tax exemption. Churches and some church-related organizations are among the few exceptions.

“The first three-year deadline for filing those returns was May 17, 2010. While thousands of organizations did file, a significant number did not.  (more…)

Jim Ulvog

Small nonprofit health care tax credit — 9-7 update

The healthcare act passed in spring 2010 provides a tax credit to small businesses and nonprofit organizations to assist with the cost of providing health care to employees.  The tax credit is available to NPOs with less than 25 full time equivalents that pay over half of the health insurance costs and have less than $50,000 average compensation per person.  For those nonprofit employers who qualify, the credit is 25% of healthcare costs and is offset against payroll taxes.  There is a phase-out calculation when full time equivalents are over 10 and average compensation is over $25,000. As you would expect, there are detailed rules and requirements. 

 The IRS has a fact sheet available.  They also have a one minute YouTube video. (A YouTube video?  From the IRS?  Yes, a YouTube video from the tax people.) 

Remember this is a brief overview.  Check out the IRS information and consult with your tax advisor before you do anything!

Update on 9-7-10 – The IRS announced today that the method of receiving the credit for NPOs will be for those organizations to file a soon-to-be modified 990-T. That is the form used to report unrelated business income and to pay taxes on the UBI.  The formwill be modified for the tax credit.  Watch for more details in the future.

Jim Ulvog