By Aubrey Clegg, CPA - Senior Audit/Tax Manager, Financial Institutions Group 

If your credit union recently merged with another financial institution or went through a charter conversion, you can expect an earlier due date for preparing a final Form 990 and 990-T. Learn more about the tax implications of these qualifying events, as Doeren Mayhew’s credit union pros provide key insights. 

Mergers  

Since 2020, the National Credit Union Administration (NCUA) approved on average, approximately 150 mergers annually. Not all, but many mergers result in a state-chartered credit union having to file a final Form 990 and 990-T. Whether a state-chartered credit union is merging into a federal credit union, or into another state-chartered credit union, the non-surviving state-chartered credit union is required to file final tax forms or request extensions for these returns by the appropriate due date.  

While most credit unions are accustomed to filing their required tax forms or extension requests by May 15 for the preceding calendar year, the due date per the Form 990 instructions states: “the 15th day of the 5th month after the organization’s accounting period ends.” An event such as a mid-year merger triggers the end of that entity’s accounting period and results in an earlier due date for final returns. For example, a state-chartered credit union that has merged into another financial institution effective June 1 of a given year is required to file its final tax forms for the period of Jan. 1 through May 31 by Oct. 15 of that same calendar year. The entity may also file a six-month extension by Oct. 15 which will extend the due date to April 15 of the following calendar year.  

All too often, credit unions request to prepare extensions for final Forms 990 and 990-T of the non-surviving credit union in a merger transaction around May 15. It is frequently discovered the merger was effective before December of the prior calendar year-end, resulting in a late filing status and related late penalties.  

Charter Conversions 

Charter conversions may also result in the need to file final tax forms. Specifically, a state-chartered credit union converting to a federal charter is required to file Forms 990 and 990-T for the period beginning Jan. 1 through the effective date of the charter conversion. Similar to a merger transaction, the due date of the final returns is determined based on the effective date of the conversion. Assuming a state-chartered credit union converts to a federal charter effective Nov. 25, 2024, the due date for the final Forms 990 and 990-T is April 15, 2025, or the 15th day of the fifth month after the effective date of the conversion. The entity may also file a six-month extension by April 15, 2025, which extends the filing deadline to Oct. 15, 2025.   

Here to Help 

Navigating merger transactions and charter conversions can be complex enough. Seeking outside assistance from credit union pros, like those at Doeren Mayhew, can provide added insight and ensure you aren’t missing critical deadlines as part of the process. To find out how we can assist you in preparing your tax forms or help you navigate the merger or charter conversion process, get in touch with our pros today. We know the way.