IRS Tax Exempt Status

Started by DouglasT1 • 5 replies • 3840 views

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DouglasT1 (California)
Posts: 1

Posted:

Hi Everyone
I am part of a 7 house HOA in California. The builder originally incorporated us as a non profit corporation in 2005 with the state of California and we've been filing Form 1120-H yearly since then. I got a call from the state of California saying that we are not exempt under California and need to fill a form 3500. Is that what you all have done who are in California? Anything else I need to do?

Also, is the 1120-H sufficient for the federal exempt status, or do I need to fill out a separate form as well for tax exempt status there?

A Volunteer HOA Treasurer

RogerB (Colorado)
Posts: 5,067

Posted:

Douglas, the is not a non-profit; it is a not-for-profit and must pay taxes. IRS form 1120-H is filed for federal taxes due. It does not exempt the HOA from paying taxes. Not from CA but since the state called I presume your also need to file the state form. That is true in CO.

NancyD1 (Florida)
Posts: 447

Posted:

Douglas,

Check your incorporation status, is it a 501c, 528 etc. If so, CA requires that you also file a FTB 3500 form. It is an exemption application from CA income taxes.

SherryP1 (Arkansas)
Posts: 7

Posted:

I just took over as president of our poa. In going back through all the records, the only tax returns were in 1998 & 1999. We are a non profit corporation in the state of Arkansas. Does anyone know, should we file a tax return?

thank you

SusanW1 (Michigan)
Posts: 5,202

Posted:

Douglas - from wwww.nonprofitblog.com

Form 3500 - Although most California laws dealing with tax exemption are patterned after the Internal Revenue Code, obtaining state tax exemption is a separate process from obtaining federal exemption. Even if you have obtained federal exemption for your organization, you must submit and Exemption Application form (FTB 3500) to us to obtain state tax exemption. You may apply for state tax exemption prior to obtaining federal tax-exempt status.

site has links to the Form.

DaneC (California)
Posts: 210

Posted:

You do need to apply to the Franchise Tax Board for State exemption. Below are some links that should help you.

Franchise Tax Board
Exempt Organizations – Non profit doesn’t mean tax-exempt.
http://www.ftb.ca.gov/forms/misc/927.pdf

Guidelines for Homeowners Associations
http://www.ftb.ca.gov/forms/misc/1028.pdf

State of California – Franchise Tax exemption application, relates to 23701t.
http://www.ftb.ca.gov/forms/05_forms/05_3500Bk.pdf

State of California – Revenue and Taxation Code 23701.
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=rtc&group=23001-24000&file=23701-23712

Exempt Organizations – Requirements for Filing Returns and Paying Filing Fees
http://www.ftb.ca.gov/forms/misc/1068.pdf

You can find many useful links in the HOA section of our website, under
CID Related State & Federal Links.

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