Inclusion of certain housing improvement expenditures that provide community benefit for reporting on Form 990, Schedule H

IRS has recently received questions regarding the inclusion of certain housing improvement expenditures that provide community benefit for reporting on Schedule H (Form 990). The Instructions for Schedule H currently include physical improvements and housing in Part II (Community Building Activities).

Nevertheless, the Instructions also provide that “some community building activities may also meet the definition of community benefit.”  The Instructions for Schedule H describe community benefit activities or programs as those addressing an established need that “seek to achieve a community benefit objective, including improving access to health services, enhancing public health, advancing increased general knowledge, and relief of a government burden to improve health.”

Thus, some housing improvements and other spending on social determinants of health that meet a documented community need may qualify as community benefit for the purposes of meeting the community benefit standard.  If a hospital chooses to report, such a community benefit in Part I (Financial Assistance and Certain Other Community Benefits at Cost) of Schedule H, then the Instructions say: “Do not report in Part II community building costs that are reported on Part I, line 7 as community benefit.”