Question:
are hoas reqauired to file federal tax reurns even if they do not need to pay taxes?
Does a Colorado HOA need to file a state tax return?
If required, what is to be done about a HOA board of directors say they are not required to file federal tax returns?
– Sam
Answer:
Hi Sam,
Yes, under federal law, HOAs are required to file a federal tax return and, if necessary, pay taxes. Associations can either file Form 1120 (for corporations) or Form 1120-H, which is specifically for homeowners associations. The only exception is if the HOA falls under IRS 501(c)(3) and has been recognized as a tax-exempt organization. In Colorado, HOAs are considered nonprofit corporations and must, therefore, also file state tax returns.
If your HOA board is operating under the wrong impression, it’s important to point this out to them to avoid penalties for the association. The association should have an accountant or tax professional advising the board on such matters.
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
