Can an HOA change its fiscal year?

By OurHOA · General information · Revised September 23, 2026

Yes, but the bylaws, the IRS and your state's report deadlines all get a say. What Form 1128 requires, the short tax year it creates, and the order to do it in.

Find out who owns the fiscal year in your documents

Start by finding the sentence that sets it. In most associations the fiscal year lives in the bylaws, usually in a short article near the end that nobody has read since incorporation. Sometimes it is in the declaration instead, which is a much harder document to amend. Occasionally no governing document names one at all, in which case the year was fixed by the first federal return the association filed, and the board has more freedom than it thinks. This matters because it decides the vote. If the bylaws set the fiscal year, moving it is a bylaw amendment and you need whatever threshold the bylaws and your state's nonprofit corporation act require, which is often a member vote rather than a board resolution. Do not let a board simply pass a motion to change the year when the bylaws name one. Our guide on how to read your HOA bylaws covers where to look and how the hierarchy between the declaration, the bylaws and board rules works.

Good reasons to move it, and one that is not

The reason boards give most often is that budget season collides with the holidays. A December 31 year end means you are adopting next year's budget in October and November, chasing quorum for a ratification meeting in the weeks nobody is home, and closing the books while the treasurer is traveling. Moving to a June 30 or September 30 year end fixes that. Other honest reasons: aligning the year with a landscaping or pool contract that runs on a season, aligning with when your reserve study preparer delivers, or squaring the books with a new management arrangement. There is one reason that does not hold up. Changing the fiscal year to push a deficit into a different reporting period does not make the deficit smaller, it makes it harder for members to see, and a board that does it will be explaining itself later. If a shortfall is the actual problem, fix the shortfall. Our guide on what an HOA budget shortfall or deficit is walks through the options that genuinely close one.

The IRS side is Form 1128, and the automatic route is free

Federal tax years do not move just because the bylaws say so. You file Form 1128, Application to Adopt, Change, or Retain a Tax Year. The form has two paths. Part II is automatic approval, which carries no user fee; Part III is a ruling request, which does carry one and is subject to public inspection. For corporations the automatic path runs through Revenue Procedure 2006-45, and here is the detail that matters for associations: the procedure excludes corporations that are tax-exempt organizations, other than an organization exempt under sections 521, 526, 527 or 528. Section 528 is the homeowners association provision, so an association that elects section 528 treatment sits inside the automatic procedure rather than outside it. Two conditions bite in practice. A corporation cannot use automatic approval if it changed its annual accounting period within the most recent 48-month period ending with the last month of the requested tax year. And the application has a window: it must be filed no earlier than the day after the end of the first effective year and no later than the due date, including extensions, of the federal income tax return for that year. An association holding a 501(c)(4) exemption instead follows Revenue Procedure 85-58, which is a different and generally simpler route.

Plan for a short-period return and protect the 1120-H election

A fiscal year change creates one stub period, and that stub gets its own return. Form 1120-H is generally due by the 15th day of the 4th month after the end of the tax year, with one trap worth knowing: an association whose fiscal year ends June 30 files by the 15th day of the 3rd month, and a short tax year ending in June is treated as ending June 30 for that purpose. So a change that lands your stub period in June accelerates the deadline by a month. Guard the election itself while you are at it. The section 528 election is made annually, for each tax year, by filing a properly completed Form 1120-H by the due date including extensions, and once filed it cannot be revoked without IRS consent. Miss the deadline on the short period and the association is looking at Form 1120 and ordinary corporate rates on income the 1120-H would have exempted. There is relief, an automatic 12-month extension for a missed regulatory election if you correct it within 12 months of the due date, but it is a rescue, not a plan. One thing a year change does not do is change your accounting method. Moving from cash to accrual is a separate request on Form 3115. Our guide on whether an HOA has to file a tax return or pay taxes covers the return itself.

Every state deadline you have moves with the year

State reporting deadlines are almost all written as so many days before or after the close of the fiscal year, so they travel with it automatically and boards get caught out. In California, Civil Code section 5300 requires the annual budget report to be distributed 30 to 90 days before the end of the fiscal year, section 5310 puts the annual policy statement on the same window, and section 5305 requires a review of the financial statements by a licensee of the California Board of Accountancy, distributed within 120 days after the close of each fiscal year, once gross income exceeds $75,000. In Florida, section 720.303(7) requires the financial report within 90 days after the end of the fiscal year, with copies to members within 21 days of completion and in no event later than 120 days after the fiscal year end. Write the new calendar out before you vote, not after. The transition year is where mistakes happen, because the old deadline has passed and the new one has not arrived, and a budget report that was due 30 to 90 days before a year end that no longer exists is a miss nobody notices until an owner asks.

A sequence that works

Do it in this order and the change is unremarkable. Confirm which document sets the year and what vote is needed, then get that vote and record the amendment. Pick the new year end and decide where the stub period falls, ideally somewhere quiet rather than in the middle of a large project. Tell your accountant before the stub period closes, not after, because they need to know a short return is coming. Tell the bank and anyone holding a loan covenant keyed to annual statements. Reset the budget calendar, the ratification meeting date, the audit or review engagement, the insurance renewal review and the reserve study delivery date, and put the new dates in one place a future board will find. File Form 1128 inside its window and file the short-period return on time. Then expect one strange-looking year of statements, where a nine-month period sits next to a twelve-month period and every comparison is off. Label it on the face of the report so nobody reads the stub as a collapse in revenue, and after that first cycle the change stops costing you anything.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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