Is a Tax Return Due Even When Taxable Income Is Less Than $100?

Answer- The question has often been asked if a tax return is required each year if net membership income is less than the $100 exemption allowed by form 1120-H. In my opinion, the answer is “yes”. Since 1120-H is an election, if the form is not filed, then no election takes place. If the election does not take place, then form 1120 is required. I know of no justification not to file form 1120 for lack of taxable income. There is the potential that all income (membership and capital contributions) could be taxable. Thus, the association to protect itself should file annually from inception.