How does an Exempt organization change its accounting period while filing 990?
4.3k views | Last modified 9/24/2020 2:58:47 AM EST | Added by ExpressTaxExempt Team

Applicable To
990-PF 990-N 990-EZ 990 8868 1120-POL

When an organization wants to change its accounting period, it must file the respective 990 forms by the due date of the short tax period from which the accounting period is to be changed. A short tax period in a taxable year is a period that is less than 12 months.

Say, a foundation, following a Calendar Tax Year as its accounting period from the year it was formed,  decides to change its accounting period to a Fiscal Year ending October 31, here's what they need to do:  

  • File a 990-PF return within the short tax period, which begins on January 1 and ends on October 31.  
  • Mention  'Change in Accounting Period' at the top of the short tax period return. 
  • File the 990-PF with the IRS.

The organization's new accounting period will now begin on November 1 and end on October 31, and that is what they need to choose in their 990-PF's going forward. 

Change if Fiscal Year for Nonprofits

If a nonprofit wants to change its fiscal year, it must file IRS Form 1128 by the 15th day of the 5th month following the close of the new fiscal year. For example, if the current fiscal year runs from January 1 to December 31, and the new fiscal year is to run from September 1 to August 30, Form 1128 is due on January 15th of the following year.

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