For non-profit hospitals and healthcare systems on schedule to conduct and complete their tri-annual community health needs assessment and adopt an implementation strategy by April 30, 2020, the IRS has extended certain deadlines due to the burdens caused by the COVID-19 pandemic. According to a July 2020 IRS release, under Notice 2020-56, hospitals required to conduct a CHNA by the end of the third taxable year and due to adopt an implementation strategy by September 15, 2020 have until December 31, 2020 to complete the requirements.
By taking advantage of the extension, relief is available to non-profit hospitals to preserve tax-exempt status and waive the $50,000 tax on hospital organizations that fail to meet the requirements.
Entities taking advantage of the extension that file Form 990 prior to December 31, 2020 need to indicate that the organization is relying on the said relief in the narrative of their Schedule H, Part V.C. stating they “should not be treated as failing to meet the requirements of section 501(r)(3) prior to December 31, 2020.” It is advised that any system taking advantage of this relief read IRS Notice 2020-56 to thoroughly understand and meet all the requirements of the extension and include appropriate wording when filing 990, Schedule H documents.