Illinois Simplifies AG990-IL Extension Process for Nonprofits

 

Streamlining Compliance: Illinois Simplifies AG990-IL Extension Process for Nonprofits

Effective October 29, 2024, the Illinois Attorney General's office has implemented significant changes to the extension process for the AG990-IL, the annual report required of charitable organizations. These modifications aim to reduce administrative burdens and align state deadlines more closely with federal requirements.

Understanding the Previous Extension Framework

Under the former system, nonprofits were required to navigate a two-tiered extension process:

  1. Initial 60-Day Extension: Organizations had to submit a written request before the original due date, which is six months after the fiscal year-end.

  2. Additional 2.5-Month Extension: To align with the federal Form 990 extension, a second request was necessary. This included:

    • A written extension request.

    • A draft AG990-IL form.

    • Financial statements (balance sheet and income statement).

    • A $15 statutory filing fee.

    • A copy of the IRS Form 8868.

This process was often seen as cumbersome, requiring substantial documentation and effort.

The New Simplified Extension Process

The revised rules now allow for a single extension that aligns with the federal extended due date, streamlining the process significantly:

  • Single Extension Request: Nonprofits can now request an extension up to the federal Form 990 extended due date (typically November 15 for calendar-year filers) by submitting:

    • A written request specifying the extended due date.

    • A copy of the IRS Form 8868.

Notably, the following are no longer required for the extension request:

  • Draft AG990-IL form.

  • Financial statements.

  • $15 filing fee.

This change reduces the administrative workload for nonprofits, allowing them to focus more on their mission-driven activities.

Important Considerations

  • Timeliness: The extension request must be submitted before the original due date of the AG990-IL.

  • Filing the Extended AG990-IL: When submitting the AG990-IL by the extended deadline, organizations must include:

    • A copy of the IRS Form 990 series return.

    • Audited financial statements (for organizations with contributions over $500,000) or reviewed financial statements (for contributions between $300,000 and $500,000).

    • The $15 annual report filing fee.

  • Transition Period: For organizations that had already filed the traditional 60-day extension before October 29, 2024, a second extension request is still necessary. However, under the new rules, only a written request and a copy of the IRS Form 8868 are required—draft forms, financial statements, and the $15 fee are no longer needed.

Conclusion

These changes represent a significant step toward simplifying compliance for Illinois nonprofits. By aligning state and federal deadlines and reducing documentation requirements, the Attorney General's office has made it easier for organizations to fulfill their reporting obligations.

For more detailed information, or assistance filing or extending your organization's AG990-IL, please reach out to us. https://www.jswhitecpas.com/

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