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July 16, 2020

IRS extends deadline to December 31, 2020, for hospital organizations to comply with Community Health Needs Assessment requirements

Due to the COVID-19 pandemic, the IRS has issued guidance (Notice 2020-56) extending the due date from July 15, 2020 (Notice 2020-23) to December 31, 2020, for hospital organizations to meet Community Health Needs Assessments (CHNA) requirements otherwise due between April 1, 2020 and December 31, 2020.

The December 31, 2020 deadline applies to requirements for a tax-exempt hospital facility to both conduct a CHNA and adopt an implementation strategy to meet the community needs it identifies in the CHNA.


IRC Section 501(r) requires tax-exempt hospital organizations that seek to qualify for or maintain tax-exempt status under IRC Section 501(c)(3) to meet certain requirements separately for each of their hospital facilities, including completing a CHNA every three years and adopting an implementation strategy to meet the community health needs identified through the CHNA (IRC Section 501(r)(3)). A tax-exempt hospital organization that fails to meet the CHNA requirement may be subject to a $50,000 excise tax under IRC Section 4959.

New deadline

The IRS has now determined that tax-exempt hospital organizations that must meet the CHNA requirements under IRC Section 501(r)(3) between April 1, 2020 and December 31, 2020 are deemed to be affected by the COVID-19 emergency and thus qualify as "Affected Taxpayers" under Notice 2020-56. Affected Taxpayers now have until December 31, 2020, to comply with their CHNA obligations.

Regarding the requirement to adopt an implementation strategy within four and one-half months from the end of the fiscal year, the notice considers the hospital facility to have timely completed this step for the CHNA if it otherwise would have been due between April 1, 2020 and December 31, 2020 and is completed by December 31, 2020.

In a press release (IR-2020-156) issued in conjunction with Notice 2020-56, the IRS instructs tax-exempt hospitals that rely on the notice and file Form 990 before December 31, 2020, to "state in the narrative Part V, Section C. of Schedule H (Form 990) that they are eligible for and are relying on the relief provided in the notice, and should not be treated as failing to meet the requirements of [IRC section 501(r)(3)] prior to December 31, 2020."


In issuing Notice 2020-56, the IRS has recognized the increased burden placed on tax-exempt hospitals and provided some administrative relief. This additional time extension to December 31, 2020, will allow each organization to conduct a thorough assessment as well as obtain the necessary approvals, either in-person or virtually, to adopt its implementation strategies. Any organization utilizing the provisions of this notice should indicate this action in its Schedule H narrative.

Please contact your Ernst & Young LLP professional for further information.


— For more information about EY's Exempt Organization Tax Services group, visit us here.


Contact Information
For additional information concerning this Alert, please contact:
Tax-Exempt Organizations Group
   • Terence Kennedy (
   • Melanie McPeak (
   • Vickus DeKock (
   • Jack Miya (