Nonprofit Tax Filing for Hospitals
Learn about 990 filing requirements, obtaining tax-exempt status, and your 990 deadline.
What Should 501(c)(3) Hospitals Know About Form 990 Filing?
IRS section 501(c)(3) provides a federal tax exemption for any organization that is organizated and operated exclusively for exempt purposes.
In this article, you can find more details on how Hospitals can obtain 501(c)(3) tax-exempt status and remain compliant with the IRS.
Table of Contents
How Does the IRS Define Hospitals?
There are two definitions for Hospitals under two different IRC sections,
Under IRC Section 170(b)(1)(A)(iii)
This section defines the hospitals with regard to examples of organizations that are hospitals and organizations that are not. Here is an example,
- A rehabilitation institution with the principal purpose of providing medical or hospital care - Qualified as a hospital.
- An organization whose primary purpose is providing health care services to patients in their own homes under their private physicians’ directions - Not qualified as a hospital.
Under IRC Section 501(r)
The IRC section 501(r) defines a hospital organization as an organization that operates a facility that is required by state laws to be licensed, registered, or similarly recognized as a hospital and any other organization that has the provision of hospital care as its principal function or purpose as determined by the secretary.
Are Hospitals 501(c)(3) Tax-Exempt?
Yes! hospitals that operate exclusively towards the promotion of health by providing healthcare services are considered charitable.
These hospitals are eligible to apply for tax exemption under section 501(C)(3) if they meet the community benefit standard. This means that they operate to promote the health of a broader class of persons that benefits the community.
How Can Hospitals Obtain 501(c)(3) Tax-Exempt Status?
The IRS requires hospitals that need to obtain 501(c)(3) tax-exempt status to file Form 1023, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.
If the hospital’s gross receipts are less than $5,000, they can also file Form 1023-EZ based on their answers on the eligibility worksheet.
Steps to file Form 1023
Hospitals can file Form 1023 by following the steps below:
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Register for an account on Pay.gov
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Enter “1023” in the search box and select it.
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Complete the form.
What are the Tax Filing Requirements for 501(c)(3) Hospitals?
The IRS requires hospitals that have obtained 501(c)(3) tax-exempt status to file a Form 990 series return every year. Hospitals are required to report information regarding their revenue, expenses, assets, liabilities, program services, activities, etc., to the IRS.
There are different form variants available in Form 990 series. Each hospital may need to file the 990 form applicable to them based on their gross receipts and assets.
Form 990-N - For hospitals with gross receipts less than or equal to $50,000
Form 990-EZ - For hospitals with gross receipts less than $200,000 and assets less than $500,000
Form 990 - For hospitals with gross receipts equal to or greater than $200,000 (or) assets equal to or greater than $500,000
Additional Filing Requirements for Hospitals
Hospitals that file 990 or 990-EZ and have generated an income of $1000 or more through unrelated businesses during the corresponding tax year must file Form 990-T.
Also, Hospitals that file 990 forms may also be required to include Schedules to report additional information as required by the IRS. There are 16 Schedules available in total. Learn more about Schedules
When is the Deadline for Hospitals to file Form 990?
501(c)(3) Hospitals are required to file their 990 returns on or before the 15th day of the 5th month after their accounting period ends. The deadline for hospitals following a calendar tax year is May 15th.
Operating on a fiscal tax year?
Use our due date calculator to find your due date.
If hospitals fail to file 990 returns within the deadline, they may be subjected to penalties for each delayed month or part of the month. The penalty amount may vary based on the hospital’s size.
Meet Your Hospital’s 990 Filing Requirements with Tax 990!
Tax 990 helps clients e-file their Form 990 efficiently and accurately. As an IRS-authorized e-file provider, Tax 990 offers various helpful features that simplify the 990 filing process.
Free 990 Schedules - Automatically includes the required Schedules for free, based on the data
you enter
Convenient Form Preparation - Form-based and Interview style filing options for convenient
form preparation
Internal Audit Check - Reviews the completed form, finds IRS errors and allows for accurate returns
Reviewers and Approvers - Invite your hospital’s higher officials to review and approve your returns
Instant Status Updates - You can opt in to IRS status updates of on your forms via email and
text notifications
Dedicated Customer Support - Our support team resolves your questions instantly via live chat, phone and email
Ready to e-file your 990 Return?
