Partnerships, S Corps, C Corps, FBAR, Fiduciary Returns of Trusts/Estates, Annual Return/Report of Employee Benefit Plans, Tax-Exempt Orgs, W-2 and 1099-MISC Forms Are All Affected
Tax return due dates, filing extensions and some of the common tax forms have been affected by the recent changes for tax year 2016 filings. Some dates have been moved forward, while others have been pushed back, depending upon the type of entity filing. There are also revisions to some extended due dates that might affect you, as well as common payroll filing deadlines. These recent changes are important because of the modifications businesses may need to make, so please make note of these changes and plan accordingly for the upcoming year to avoid any surprises and late filings.
Revised Due Dates for Partnership and C Corporation Tax Returns
The “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (P.L. 114-41) was signed into law on July 31, 2015. This new law contained a number of important tax provisions, including revised tax return due dates for Partnerships and C Corporations, and several other changes. Here is an overview of these provisions, which may impact the due dates of your tax filings.
For tax years 2015 and prior, Corporations (including S Corporations) needed to file their tax returns by the 15th day of the third month after the end of their tax year. Thus, Corporations using the calendar year needed to file their returns by March 15 after the calendar year ended. The due date for a Partnership tax return was the 15th day of the fourth month after the end of the Partnership’s tax year. Thus, Partnerships using a calendar year were required to file their tax returns by April 15th of the following year.
The new law, however, establishes significant changes in the tax return due dates depending on the entity. These new tax return due dates are effective for tax years beginning after December 31, 2015. Thus, these new due dates will first apply for the calendar year 2016.
The key changes in tax return due dates are as follows:
- The tax return due date for Partnerships and S Corporations will be the 15th day of the third month after the end of the tax year. Thus, entities using a calendar year will have to file their 2016 tax returns by March 15, 2017. This filing deadline is accelerated by one month for Partnerships, while the filing deadline for S Corporations stays the same.
- The tax return due date C Corporations will be the 15th day of the fourth month after the end of the tax year. Thus, C Corporations using a calendar year will need to file their 2016 tax returns by April 15, 2017. In other words, the filing deadline for C Corporations will be one month later than it had been in the past.
- Under a special rule for C Corporations with fiscal years ending on June 30, the change is deferred for ten years. Thus, the new 15th day of the fourth month due date won’t apply until tax years beginning after December 31, 2025.
Revised Extended Due Dates
Taxpayers who are unable to file their tax returns on time can obtain from the IRS an automatic extension of time to file their tax returns (please keep in mind, this is only an extension of time to file the tax return; not an extension of time to pay any tax owed).
Effective for tax returns for tax years beginning after December 31, 2015, the new law directs the IRS to modify its regulations to provide for a longer extension to file a number of forms, including the following:
- Included in this change is a six month extension for Partnerships up from the previous five month extension. The extended due date for a Partnership tax return will be September 15 for a calendar year Partnership.
- The extended due date for the fiduciary income tax return for a trust or an estate (federal Form 1041) will be five and a half months (up from five months in prior years). Thus, for the 2016 year, the tax return due date for trusts and estates that request an extension will be September 30, 2017.
- FinCEN Report Due Date Revised for FBAR filings. Taxpayers with a financial interest in or signature authority over certain foreign financial accounts must file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). For the 2015 year and prior, this form needed to be filed by June 30 of the year following the calendar year being reported, and no extension of time to file was permitted. Under the new law, for tax years beginning after December 31, 2015, the due date of FinCEN Report 114 will be April 15th with a maximum extension for a six month period ending on October 15th. Thus, for the 2016 year, the initial due date of FinCEN Form 114 will be April 15, 2017, with an extension available until October 15, 2017.
- The extended due date for the Annual Return/Report of Employee Benefit Plan (Form 5500 series) will have a maximum automatic extension of three and a half months (up from the two and a half months in prior years). Thus, for 2016 calendar year filers, the extended due date will end on November 15, 2017.
- In addition, for the 2016 year, for the filing of Form 990 for Tax-Exempt Organizations there will be a new single, automatic 6-month extension, eliminating the need to file the current first 90-day extension.
While not part of the above Highway Bill, Congress passed separate legislation that impacts the due date of another common tax filing for many businesses and organizations.
- For the Form W-2 for employees and Form 1099-MISC for nonemployees, the due date to submit these forms to the IRS has been moved up to January 31, 2017 for the 2016 year. This is same date these forms need to be provided to the recipient of the Form W-2 and Form 1099-MISC. For the 2015 year, these forms were due to the government by February 28, 2016 (and by March 31, 2016 if filed electronically).
This acceleration is designed in part to curb cases of tax identity theft, but it compresses the time frame for employers to get these forms filed. Further, Congress has significantly increased the penalties for late filing of informational forms in recent years, so employers will need to monitor these due dates closely for their Form W-2s and Form 1099s.
For further information, the AICPA has prepared a summarized chart with these new due dates. https://www.aicpa.org/InterestAreas/Tax/Resources/Compliance/DownloadableDocuments/Due-Dates-Summary-Chart.pdf
Please contact your Sikich tax professional if you have any questions or would like more details about these recent changes.