The IRS announced relief for meeting Community Health Needs Assessments requirements.
The IRS has some good news for tax-exempt hospitals feeling overwhelmed by the COVID-19 pandemic. In a recent press release, the agency says that it is once again moving the deadline for Community Health Needs Assessments.
Initially moved from April 1 to July 15, the IRS is now pushing the CHNA deadline to December 31, 2020. This development comes as coronavirus cases are surging across the country, hopefully providing affected hospitals the time they need to maintain their tax-exempt status.
Community Health Needs Assessments are one requirement for hospitals to establish and maintain their tax-exempt status. According to the IRS press release, that means “conducting a CHNA and adopting an implementation strategy to meet the community health needs identified through the CHNA”–which must now be completed before the new December 31 deadline. But what does that look like on the tax side of things?
“Tax-exempt hospital organizations filing Forms 990 must indicate on Schedule H if they have conducted a CHNA in the current taxable year or in either of the two immediately preceding taxable years and if they have adopted an implementation strategy to meet the significant health needs identified through the most recently completed CHNA,” the IRS explains. In addition to putting the hospital’s tax-exempt status in jeopardy, it can come with a $50,000 tax “for each hospital facility that fails to meet either or both of these requirements.”
The IRS says hospitals that decide to take advantage of the new deadline “should state in the narrative of Part V.C. of Schedule H (Form 990) that they are eligible for and are relying on the relief provided in [Notice 2020-56].”
The “Coronavirus Tax Relief and Economic Impact Payments” page on IRS.gov contains information about other tax relief provided as a result of the pandemic.
Source: IR-2020-156
Upstate Tax Professionals