Here are some updates from the California Franchise Tax Board (FTB) affecting nonprofit tax-exempt organizations:
Changes Effective January 1, 2021
- Form 3500 Application Fee Eliminated – Form 3500 applications received on or after 01/01/2021 will no longer require the $25 application fee. FTB will use the received date as the determining factor, so applications mailed prior to this date, but not received until after this date will no longer need the fee. Payments attached to applications received after this date will be treated as overpayments and refunded.
- Form 199 Filing Fee Eliminated – Form 199 Information returns due after 01/01/2021 will not be assessed the $10 timely filing fee or the $25 late filing fee (although the late filing penalty of up to $40 will still be applicable.) FTB will use the due date as the determining factor. So if a return is due 01/15/2021 but is filed 12/04/2020, no filing fee will be assessed. Returns due prior to 01/01/2021 but filed after will still owe the filing fee and applicable penalties. Fees paid that are not owed will be refunded.
- Form 3500 – The goal is to assign a filed Form 3500 within 60 days and complete processing it within 90 days (but the oldest Form 3500 being processed now is from 7/1/2020)
- Form 3500A – The oldest unassigned Form 3500A is from 10/7/2020
- Form 3502 (Nonprofit Corporation Request for Pre-Dissolution Tax Abatement) —337 Forms 3502 are currently in process; processing time is approximately 6 months
- Signatures – Copies of wet signatures will be accepted
New Form 3500
- A revised version of Form 3500 will be released shortly. Stay tuned for a link.
- The base Form has been reduced to 5 pages, and financials are not required in the format provided by previous versions of the Form.