How to change your nonprofit’s fiscal year

Carol,
I help run a homeschool co-op that has 501(c)(3) status.
The IRS has our fiscal year end as December 31 because that’s what our original officers put on our SS-4 application to get our employer ID number.  But we’d like to change it to a school year with our year end being June 30.

How can we change our fiscal year?

Tracy in Michigan

 

Tracy,

Changing your fiscal year is pretty easy.

Here’ she IRS information on how 501c exempt organizations can change their fiscal year: Exempt Organizations Change in Accounting Period

Large nonprofits

If your homeschool organization is large enough that you file a Form 990 or 990-EZ (more than $50,000 in annual gross revenues), then you file a Form 990/990-EZ for the short period resulting from the change.

In Tracy’s case, the short period would be from January 1 until June 30.

Write “Change of Accounting Period” at the top of this short-period return.

 Small nonprofit organizations

But chances are your homeschool organization is small and files the annual information epostcard, Form 990-N. There is no way to write “Change Accounting Period” on the electronic Form 990-N.

In that case you can file the longer Form 990-EZ or file a Form 1128, Application to Adopt, Change, or Retain a Tax Year, to change its accounting period. Form 1128 instructions explain how to complete and submit the form.

I hope that helps,

Carol Topp, CPA
HomeschoolCPA.com
Helping Homeschool Leaders

Comments

  1. Good overview of the process of changing a fiscal year. It’s good to have a resource like this for beginners or as a reminder to those needing it. Thanks so much for sharing!

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