At Issue

Congress and the IRS were very busy at the end of 2015. What items should Christian colleges have on their radar screen with regard to tax issues?

Situation

Denali Christian College (DCC) is a nonprofit organization under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(ii). We were talking to their Controller about completing their 2014 Form 990 (extended due date of 2/15/16), and she asked us if there were some tax issues that she should be aware of as we enter 2016. We told her that there were some particular areas of focus for DCC.

Rules

  1. “Forgiveness” of penalties with regard to Form 1098-T notices for prior years concerning incorrect or missing tax identification numbers (TINs) for students.
  2. The IRS will not penalize institutions for missing or incorrect TINs on 2015 – if you follow the written guidelines for requesting TINs.
  3. Filing deadlines in 2016 for Form 1095-B and 1095-C have been extended.
  4. After 2016, there will only be one six-month extension for Form 990.
  5. In early 2017, reporting Form W-2s and 1099-MISCs to the IRS will have an accelerated January 31 deadline rather than the current February 28 deadline.
  6. Higher education institutions will no longer have the option of reporting amounts billed on IRS Form 1098-T. All institutions will be required to report payments for qualified tuition and related expenses. The change is effective for tax year 2016 forms, generally filed in 2017.
  7. The “Cadillac Tax” under the Affordable Care Act has been “pushed back” two years – first reporting will now be 2020 for the 2019 tax year.
  8. Has DCC done the “ALE” calculations for 2014 and 2015?
  9. The “IRA Charitable Rollover” provision (that had expired 12/31/14) was retroactively and permanently extended. (*Development Director alert*)
  10. Section 202 of the PATH Act of 2015 contains a “Safe harbor for de minimis errors on information returns and payee statements.” (e.g. Form W-2).

Bottom Line

We will be providing more information on all of these items in weeks to come in “Tax Tips.” In addition, Capin Crouse will be covering them in our monthly tax webcast on January 28th. Click here for more information.

It makes sense to touch base with a qualified tax advisor on these items. He or she will be able to help you navigate which ones may affect your school.

Specific questions? Email Dave Moja.

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.