Surprise! Hidden away inside a recent new federal law are changes to many tax return due dates – both in terms of original and extended deadlines. On July 31, 2015, the President signed H.R. 3236, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.” The Act draws its name from provisions that continue the highway trust fund for another three months and provide greater flexibility to veterans seeking healthcare. However, it also includes a plethora of tax-related changes applicable to taxable years beginning after December 31, 2015. That means the changes will generally apply to 2016 returns filed in 2017. Here are the changes for the more common tax returns:
Forms 1065 (partnerships and some limited liability companies): The new due date is the 15th day of the third month following the close of the fiscal year. This is a month earlier than before. This will allow partners of calendar year partnerships to receive their Schedules K-1 in time to file their Forms 1040 without an extension. The new law also allows for a 6-month extension of Form 1065. This is an extra month. However, note that between the change in the due date and the change in the extension period, the extended due date of a Form 1065 remains the same as before.
Forms 1120 (C corporations): The new due date is the 15th day of the fourth month following the close of the fiscal year. This is a month later than before. There is an exception for C corporations with fiscal years ending on June 30 – their due date will remain September 15 until tax years beginning after December 31, 2025, when it will become October 15. The new law continues to allow an automatic 6-month extension of Form 1120, except for C corporations with calendar years. Those will be allowed an automatic 5-month extension until 2026. However, note that between the change in the due date and the change in the extension period, the extended due date of a calendar year-end C corporation’s Form 1120 remains the same as before.
Form 1041 extensions (estates and trusts, but not bankruptcy estates): The new law allows for a 5½-month extension to September 30 for calendar year-end entities. This is an extra half month.
Form 5500 extensions (employee benefit plans): The new law allows for an automatic 3½-month extension to November 15 for calendar year-end plans. This is an extra month.
Form 990 (series) extensions (exempt organizations): The new law allows for an automatic 6-month extension to November 15 for calendar year-end organizations. This replaces the practice of filing for two consecutive 3-month extensions, the second of which requires reasonable cause.
These and other much-needed due date and extension changes in this new law are geared to provide more accurate information to taxpayers and to streamline the process for tax preparers. The anticipated reduction in the number of extended and amended tax returns filed each year will be greatly appreciated by taxpayers, tax preparers, and the IRS alike. Click here for more information on the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.
Written by: Debi Ondrik, CPA