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My association is a nonprofit. I didn't think nonprofits had to pay taxes.

There are many different kinds of nonprofits. All homeowners associations must file a tax return and most are not exempt from paying taxes.

Do I have to file a state tax return for my association?

Every state has different rules for associations.  Check with your state taxing authority to determine your associations filing requirements.

When is my tax return due?

Your 1120H is due 2-1/2 months after your association’s year end. You can file an extension which gives you an additional 6 months to file the return, but not an extension to pay any tax. The IRS will assess interest and penalties on any tax that is not paid on time. For example, if your association’s year end is June 30th, you have until the following September 15th to file the return without an extension, or until March 15th with an extension. But if you owe tax, you must estimate and pay it by September 15th.

Who’s responsible for filing the form?

The board of directors has a fiduciary responsibility to make sure the association meets all of its obligations including filing its tax return and paying any taxes.  A board officer will need to sign the return.

What if I need a copy of my return at a later date?

We retain a copy of your return in a secure online account for you to login and retrieve at a later date.

How does the program calculate the amount of tax due or refund?

The program calculates the amount due or refund based on IRS regulations and homeowners association tax law from the information you provide.

Our association filed an 1120-H last year, why won’t the program allow me to print a return this year?

If we think we can save you additional money or you don’t qualify to file form 1120-H this year, you can contact us for additional options.

What is exempt function income (non-taxable income)?

Exempt function income consists of membership dues, fees, or assessments from owners of an association.   Exempt function income includes:

  • Monthly, quarterly and yearly dues and assessments
  • Interest and late fees charged to members
  • Utility pass through fees
  • Move in and move out fees
  • Fines charged to members

What is non-exempt function income (taxable income)?

Nonexempt function income is revenues and fees charged to both members and non-members for services provided by the association.  Nonexempt function income includes:

  • All payments received from nonmembers
  • Interest earned from banks or investment brokers
  • Payments from members for special use of the association’s facilities, such as the clubhouse, special parking, guest room rentals and pool fees
  • Payments from members for services provided by the association such as food service, pool fees, parking fees, laundry, rentals, golf, transportation,  vending machines, storage rental and special parking fees.
  • Any other revenues that are not exempt function income

What accounting method do I use for filing the 1120-H?

Use the accounting method regularly used in keeping the association’s books and records, typically cash or accrual.

What if my association hasn't filed a tax return for a number of years?

If your association hasn't filed a tax return or your tax return is late please call us and we will help you determine your best option.

What if I need to file an extension?

Form 7004 is used to file an extension for an association.  The instructions and mailing address for your association can be found at 7004 Instructions, or you may contact us and we will help you file an extension.

What if I need to file an 1120 tax return?

An 1120 tax return for a homeowners association can be very complicated and carries a much greater risk.  Please contact us if you think you may need to file an 1120.

How do I locate my association’s EIN?

Your association’s EIN will be located on your prior year federal tax return.  If your association has not filed a tax return or doesn’t have an EIN you will need to apply for one with the IRS.

What name should I use on my association’s tax return?

Your association’s name should be located on your prior year federal tax return.  The name should be the legal name of the association as set forth in the legal documents.

Our association is classified as a timeshare why can’t I use your program?

Timeshare association’s tax rules are similar but not identical to other residential real estate associations and currently our software does not have the capability to calculate for the differences.  Please contact us if you need assistance in filing as a timeshare association.

Why are the expenses on my tax return different from what I entered?

The program will calculate the allowable expenses based on the information you provide and will likely be different than the amounts you entered.

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About HOA Tax Help

HOA Tax Help was started by 3 CPA’s who felt a need to help small associations save money by being able to prepare and file their own tax returns.

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