States Moving to Conform Tax Due Dates with Federal Law

As you recover from yet another grueling tax season, the optimist (and realist sometimes) in me says next year will be better with fewer practitioner frustrations. After many years of AICPA tax policy and advocacy efforts, Congress enacted several AICPA-supported federal due date changes and a de minimis safe harbor of $100 of income/$25 of withholdings for corrected Form 1099s that take effect for 2016 tax returns (2017 filing season).

New Federal Due Dates

As described in detail in the AICPA summary chart, these federal due date changes should provide a more logical workflow next year. Starting with 2016 returns, business entity investors’ Schedules K-1 are due before the investors’ returns are due, and foreign account information (FBAR) is due (and can be extended) when the individual returns are due. Here’s a brief recap of the new federal tax return deadlines:

Partnership and S corporation information returns are due March 15, providing investor Schedule K-1 information to their partners and shareholders (including corporations) before the investors’ returns are due.

Tax returns for calendar-year corporations, individuals, trusts and estates, and FBAR are due on April 15.

The extended due date for partnerships continues to be September 15, along with corporations (until 2026). The extended due date for trusts and estates is September 30.

The extended due date for individuals and FBARs (and starting 2026, for extended corporations) is October 15.

State Tax Return Due Dates

As we get ready to implement the new federal due dates in the upcoming 2017 filing season (for 2016 tax returns), many states are considering legislation, regulations or administrative/guidance changes to conform state tax return due dates to the new federal due dates.

States should consider making sure the state corporate tax return is not due before the new federal corporate due date of April 15. Otherwise, CPAs may need to prepare state tax returns based on incomplete federal information. Also, states may want to consider aligning the partnership due dates to the new federal due date of March 15.

State Legislative Update

So far, due dates conformity legislation has been enacted in the following states:

As of May 19, Arizona and California were considering proposals to alter their due dates.

Several states that might want to consider changes to the state corporate tax return due date include the District of Columbia, Illinois, Massachusetts, New Hampshire, Ohio and Wisconsin. Some states, such as Alabama, may require only a regulatory rule or guidance change from the state departments of revenue to change their due dates.

Lastly, as taxpayers and practitioners plan for the 2017 filing season, they may want to update their work processes and workflow align with the new due dates. The AICPA has numerous resources to help you and your clients prepare, including: