The Corporate Transparency Act (CTA) is officially in effect. The U.S. Department of Treasury’s portal is running and accepting beneficial ownership information reports.
For existing community associations incorporated in the state and with less than 5 million dollars in annual income or less than 20 employees and without an IRS 501(c)(4) tax-exempt determination, filing must be completed by Jan.1, 2025.
For community associations incorporated after Jan.1, 2024, you will have 90 days to complete the 51-question initial report.
The good news for existing community associations is there is time to comply with CTA. The bad news is compliance is not simple. A board point of contact for current community associations must file a 51-question initial report and provide requisite information into the database established by the U.S. Department of Treasury.
Community association boards, community managers, and other professionals assisting with compliance should be familiar with the reporting portal and the 51-question report. It’s important to note any changes to the initial report must be reported within 30 days of the change.
We encourage community associations to become familiar with the compliance requirements and make note of the filing deadline of Jan. 1, 2025, for existing communities.
CAI recognizes this is an ill-conceived statute that is overburdensome, impractical, and likely ineffective. We continue to work to urge delay of the Jan. 1, 2025, filing requirements AND exempt community associations from the beneficial ownership interest reporting requirements. We’ve submitted a letter to the appropriate officials requesting an exemption and we continue to attempt to work with the treasury department and Congress to mitigate the negative impact of this statutory requirement.
In December, there was some congressional activity and movement in the right direction for community associations. The U.S. House of Representatives passed the Protect Small Business and Prevent Illicit Financial Activity Act (H.R. 5119) sponsored by Reps. Joyce Beatty (D-Ohio) and Zach Nunn (R-Iowa) by a vote of 400-1. This bill would delay CTA reporting requirements for a year. Currently, a companion bill is before the Senate, so there’s hope. Additionally, a bipartisan group of more than 80 senators and representatives sent a letter to the Financial Crimes Enforcement Network calling for a one-year delay of all reporting requirements under the CTA. Contact your senator and demand the Senate pass H.R. 5119 now. Click here to take action today!
We’ll continue to keep you updated on the status of CAI efforts and additional information that may be helpful to community associations in the U.S.
Join CAI on Jan. 31 for a webinar answering key questions regarding the CTA.
For additional background on the CTA and its impact on community associations, read this blog post here.