What Is Form 8868 and How Is It Used for Tax Filing?

Nonprofits and tax-exempt organizations must meet IRS filing deadlines but can request extra time when needed. They do this by submitting a specific form designed for extensions.

Purpose

Form 8868 grants tax-exempt organizations a six-month automatic extension to file their annual returns. This allows time to compile financial records, complete audits, and ensure accurate reporting. The form does not require an explanation for the delay as long as it is submitted correctly and on time.

The extension applies to various tax-exempt returns, including Form 990, 990-EZ, 990-PF, and 990-T. Missing the deadline without an extension can lead to penalties. The IRS charges $20 per day for smaller organizations, up to $12,000. Larger entities with annual gross receipts over $1,239,500 face penalties of $110 per day, capped at $61,000.

Organizations That Use It

Many tax-exempt entities rely on Form 8868. Charitable organizations under Section 501(c)(3), including public charities, private foundations, and religious institutions, frequently file for extensions. Managing multiple revenue streams—donations, grants, and program service income—can require additional time for financial reporting.

Other tax-exempt organizations also benefit from extensions. Social welfare organizations under Section 501(c)(4), labor unions under 501(c)(5), and business leagues under 501(c)(6) often deal with complex financial structures requiring precise accounting. These groups rely on membership dues, sponsorships, and other funding sources.

Educational institutions and healthcare organizations also use Form 8868. Universities, research institutions, and nonprofit hospitals handle extensive financial transactions, including tuition revenue, endowments, and government funding. The extension helps them meet reporting requirements accurately.

Filing Steps

Organizations must ensure their identification details—name, employer identification number (EIN), and address—match previous IRS filings to avoid processing delays.

Next, they select the return being extended. Form 8868 covers multiple filings, including Form 990-series returns and Form 4720, which reports excise taxes on private foundations and other tax-exempt entities. Selecting the correct return is essential to avoid an invalid submission.

Organizations filing Form 990-T, which reports unrelated business income, must estimate their tax liability and submit payment with the extension request. While the extension grants more time to file, it does not extend the deadline for tax payments. Underpayment can lead to interest charges and penalties.

The IRS accepts Form 8868 electronically through its Modernized e-File (MeF) system or by mail. Electronic filing is recommended for immediate confirmation and fewer processing errors. If mailing, organizations should use certified mail with a return receipt to ensure proof of submission, as postal delays do not excuse late filings.

Deadlines

Form 8868 must be submitted by the original due date of the tax return. For most tax-exempt entities filing Form 990, 990-EZ, or 990-PF, the deadline is the 15th day of the fifth month after the end of their fiscal year. Organizations following a calendar-year reporting period must file by May 15.

The six-month extension is automatic, but no further extensions are allowed. Missing both the original and extended deadlines results in penalties, and failure to file for three consecutive years leads to automatic revocation of tax-exempt status under Internal Revenue Code Section 6033(j). Reinstating tax-exempt status requires filing Form 1023 or 1024 and paying a user fee, a process that can be time-consuming and administratively burdensome.