IRS Form 1120-H (U.S. Income Tax Return for Homeowners Associations) is used by a homeowners association (HOA) to report their income and expenses. This form allows qualifying HOAs to take advantage of a specific tax treatment that exempts most of the HOA income from corporate taxation. In effect, the HOA is only subject to corporate income taxes on its net investment income.

Purpose of Form 1120-H
  • Special Tax Treatment. A homeowners association is generally organized as a C corporation. However, the Form 1120-H allows the HOA to exclude its net exempt function income from taxation. The HOA does pay a flat tax of 30% on non-exempt income, which generally includes gross investment income (e.g., interest, dividends, rents, royalties, capital gains).
  • Income and Expense Reporting. To report income and expenses related to the HOA’s exempt and non-exempt functions.
Who Must File and Deadlines
  • Qualifying Homeowners Associations. HOAs that meet specific criteria can file Form 1120-H.
  • HOA Exempt Purpose. The HOA must be organized and operated primarily to manage, acquire, construct, and maintain property.
  • HOA Income Restrictions. At least 60% of the HOA’s gross income must be derived from membership dues, fees, or assessments from owners of residential units, buildings, or lots, and at least 90% of the HOA’s expenditures must be for the acquisition, construction, management, maintenance, and care of association property.
  • No Private Enrichment. No individual can profit from the HOA’s net earnings.
  • Due Date. The Form 1120-H must be filed annually and is generally due by the 15th day of the 4th month after the end of the HOA’s tax year. For calendar-year filers, this is April 15. Extensions can be requested using Form 7004 (Application for Extension of Time to File).
Information Required on Form 1120-H
  • Basic Information. Name of the HOA, address, Employer Identification Number (EIN), and the date the association was formed.
  • Type of HOA. Is the HOA organized as a condominium management association, residential real estate association, or a timeshare association.
  • Income and Expense Reporting. The HOA must separately report the exempt function income (membership dues, fees, assessments) from non-exempt function income (interest, dividends, rental income).
  • Corporate Tax Rates. The HOA is taxed at a flat rate of 30% on non-exempt function income (32% for timeshare associations).
Video Tutorials on Form 1120-H

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Additional Information

HOAs can find more information on their tax reporting obligations in the Form 1120-H Instructions and the IRS website.