Changes to Filing Due Dates for Business Income Tax Returns

The Highway Act is making changes to our familiar due dates for business income tax returns. To recap current due dates, form 1120 (U.S. Corporation Income Tax Return) is initially due two and a half months after the close of the corporation’s tax year and can be extended for a six month period. 

Calendar year corporations are, therefore, initially due on March 15^th following the end of the calendar year and can be extended through September 15^th. Form 1065 (U.S. Return of Partnership Income) is initially due three and a half months after the close of the calendar year with an option for a five month extension. Calendar year partnerships are initially due April 15^th with an extension making the due date October 15^th.

Read more by Barb Theofilos: When Are Severance Payments Made to FICA? 

Tax practitioners have long had issues with the due date of the partnership tax return because the final due date falls on the same final due date as individual tax returns. As a result, an individual taxpayer owning a partnership interest must sometimes wait for their Schedule K-1 to arrive, in order to complete their individual tax filing at the very last minute. This also leaves some tax practitioners in a pinch to complete all the individual tax returns during the final hour on October 15^th.

Additional tax read: Mandatory Filing Now Required for U.S. Owners of Foreign Entities

The newly enacted Highway Act is intended to alleviate some of the last minute filing burdens for individuals. Business due dates for tax years beginning after 12/31/15 are changing. This change will begin with 2016 returns, which are due in 2017. The new law changes the due dates as follows:

• The Form 1065 initial due date will be two and a half months after the close of the partnership’s tax year, with the opportunity to file a six month extension. Calendar year partnerships will therefore be due March 15^th with an extension available through September 15^th.
• The Form 1120 initial due date for calendar year corporations will be three and a half months after the close of the corporation’s tax year, which is April 15^th. An automatic five month extension until September 15^th also applies.
• There is a special transition rule for C corporations with fiscal years ending on June 30^th. These corporations are not required to follow the new due date rules until tax years beginning after 2025. The initial due date for these C corporations will remain at two and a half months after the June 30^th year end with an initial due date of September 15^th.
• The current due dates for Form 1120S (U.S. Income Tax Return for an S Corporation) remain unchanged with an initial due date of March 15^th and an extended due date of September 15^th for calendar year S corporations.

To recap,  these new due dates will take effect for tax years beginning in 2016. This allows tax practitioners time to update any due date monitoring systems to ensure that the changes to the due dates are properly monitored.

Tax law can be confusing and the changes in filing due dates between business and individual tax returns certainly can add to the confusion. I am ready to help - drop me a note at btheofilos@zinnerco.com or call 216-831-0733 to arrange a no-obligation consultation.