New Due Dates for 2016 Tax Returns filed in 2017 and beyond

On July 31, 2015, President Obama signed into law P.L. 114-41, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.” The legislation was really dealing with the Highway Trust Fund and related measures, but included a number of important tax provisions, such as revised due dates for Form 1065 Partnership and Form 1120 C Corporation returns. Also included are revised extended due dates for many returns.

The following includes background and revised due dates for partnership and corporate returns:

• Domestic corporations (including Subchapter S Corporations) with a fiscal year must file their returns by the 15th day of the 3rd month after the end of the tax year. As a result, corporations with a calendar year must file their returns by March 15 of the following year. The Form 1065 Partnership return has been due on the 15th day of the 4th month after the end of the partnership’s tax year. As a result, a
partnership with a calendar year was required to file returns by April 15 of the following year.

• Since the partnership return date is the same as for individuals, those taxpayers holding partnership interests often must file for an extension to file their personal returns because their Schedule K-1’s don’t arrive until the last minute.

The new law has a major restructuring of entity return due dates, effective generally for returns for tax years beginning after December 31, 2015. Both Partnerships and Subchapter S corporations will have to file their returns by the 15th day of the 3rd month after the end of the tax year. As a result those entities with a calendar year will have to file by March 15 of the following year. §6072(b) now provides that the filing deadline for Partnership returns will be accelerated by one month. The filing deadline for Subchapter S corporations stays at March 15 of the following year.

C corporations will have a new filing date which will be by the 15th day of the 4th month after the end of the tax year. As a result, corporations with a calendar year will now have to file by April 15 of the following year and the filing deadline for C corporations is now deferred for one month.

The new deadlines generally go into effect for returns for taxable years that begin after December 31, 2015. Under a special rule, for C corporations with fiscal years ending on June 30, the change won’t apply until tax years beginning after December 31, 2025. (ACT Sec. 2006 (a)(3))

There are also revised statutory automatic extension rules for corporations.

Under the prior law, §6081(b) provided for a 3-month automatic extension to file corporate returns, but Reg. §1.6081-3(a) states that there is a 6-month automatic extension of time to file corporate returns.

Under the new law, effective generally for returns for tax years beginning after December 31, 2015, the 3-month automatic extension of time in §6081(b) is changed to an automatic 6-month extension.

For any return for a tax year of a C corporation which ends on December 31 and begins before January 1, 2026, the automatic extension period was 5 months and not 6 months. For any return for a tax year of a C corporation which ends on June 30 and begins before January 1, 2026, the automatic extension period is 7 months and not 6 months.

There are also revised extended due dates for many other returns and the IRS regulations prescribe various extended due dates for taxpayers that file for an extension.

Under the new law, effective for returns for tax yeas beginning after December 31, 2015, Act Sec. 2006(b) directs IRS to modify its regulations to provide that the maximum extension for:
a. The returns of Partnerships filing Form 1065 will be a 6-month period ending on September 15 for calendar year taxpayers. (It was 5 months.)
b The return of trusts and estates filing Form 1041 will be a 5 1/2-month period ending on September 30 for calendar year taxpayers. (It was 5 months.)
c. The returns of employee benefit plans filing Form 5500 will be an automatic 3 1/2-month period ending on November 15 for calendar year plans. (It was 2 ? months.)
d. The returns of organizations exempt from income tax filing Form 990 (series) will be an automatic 6-month period ending on November 15 for calendar year filers. (It was 3 months.)
e. The return of organizations exempt from income tax that are required to file Form 4720 returns of excise taxes is an automatic 6-month period beginning on the due date for filing the return, without regard to any extensions. (It was 3 months.)
f. The return of trusts required to file Form 5227 (Split-Interest Trust Information Return) will be an automatic 6-month period beginning on the due date for filing the return without regard to any extensions. (It was a 3 month period.)

For more information on these dues date changes, contact PK Tax Services and we can walk you through any that may apply to your situation.