Written by David T. Schwindt, CPA

Dear Directors:

The IRS just announced that U.S. Income Tax Return for Homeowners Associations, Form 1120-H, is available for electronic filing for the first time for Year 2024. The IRS requires associations that file 10 or more returns of any type during the calendar year to electronically file their federal tax return, Form 1120-H. Similar rules apply to associations filing Form 1120, U.S. Corporation Income Tax Return, but those rules went into effect for calendar year 2023 tax returns. Each association will need to determine if they meet the 10 or more return requirement by aggregating all income tax, information returns, employment tax and excise tax returns. Each Form 1099, W-2, Form 940, Form 941, income and excise tax return are counted separately. For example, If an association files 9 forms 1099 and one federal income tax return during 2024, they meet the 10 return threshold and are required to electronically file Form 1120-H for tax year 2024. Associations that do not meet the 10 return threshold in a year may choose to file on paper or electronically file. Oregon Department of Revenue requires that Oregon tax returns be electronically filed if the association is required to electronically file with the IRS. Fiscal year end Form 1120-H filers will apply the 10 return threshold to returns filed during the calendar year, but the electronic filing rules apply to the fiscal year in which the calendar year ends. For example, if a June 30, 2025 fiscal year filed 10 or more total returns during calendar year 2024, their June 30, 2025 fiscal year Form 1120-H would need to be electronically filed as the calendar year ending December 31, 2024 falls within the June 30, 2025 fiscal year end period.

The process of electronic filing includes preparation of the association tax return, issuance of a pdf copy of the tax return(s) to the signer for review and approval, return of a signature page authorizing our firm to electronically file the tax return(s), and electronic submission of the tax return(s) to the IRS. Prior to filing the tax return(s), the signer will need to provide their first and last names, title, date and if electronically filing in Oregon, their social security number. The signer’s social security number does not print on any tax documents, however, but is included in the information transmitted electronically to the governments. State and City of Portland/Multnomah County electronic filing is available if there is a filing requirement in these jurisdictions and Oregon and the City of Portland accept the federal signature page, therefore a separate state or local signature page is not necessary.

Although the process of sending a copy of the tax return to the signor for review and the gathering of signatures and signor information may change, all other procedures of providing information relating to the preparation of tax returns will not change. In order to maintain consistency, timing and accuracy of the preparation and filing of tax returns, Schwindt & Co will now electronically file all federal, state, and local Homeowner Association tax returns unless the Association provides an assertion that the Association meets the requirement of less than the 10 forms filing threshold and elects to file paper returns.

For further information, please contact cpa@schwindtco.com.