In an effort to minimize taxpayers' timing difficulties with filing dates for several common types of returns and reporting forms, Congress included provisions in the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, P.L. 114-41, revising original and extended due dates for tax years starting after Dec. 31, 2015 (e.g., 2016 returns prepared during 2017). The exhibits below summarize the new dates for some of the most common returns for taxpayers with calendar tax years and C corporations with a June 30 tax year end.
Except as noted in Exhibit 2 regarding Forms 1120 filed for corporations using June 30 as their tax year, corresponding changes are made for taxpayers that use a fiscal year as their tax year. Thus, partnerships and S corporations with a noncalendar fiscal year have a return due date of the 15th day of the third month following the close of the fiscal year. C corporations with a noncalendar fiscal year ending on any day other than June 30 have a due date of the 15th day of the fourth month following the close of the fiscal year.
In addition, other important due date modifications for tax years beginning after Dec. 31, 2015, include:
1. FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), will be due on April 15 and may be extended until Oct. 15.
2. Information returns (e.g., Forms W-2 and 1099) must continue to be furnished to recipients by Jan. 31 and filed with the IRS and Social Security Administration (where required) by the last day of February for paper forms and March 31 if filed electronically.
Why the Change?
For a number of years, taxpayers voiced concerns over the due date system. At the center of these concerns was the brief (and at times nonexistent) turnaround time between the receipt of passthrough information on Schedules K-1, Partner's [or Shareholder's] Share of Income, Deductions, Credits, etc., and the return filing deadline of the partner or shareholder in the passthrough entity. For instance, consider a situation where a calendar-year C corporation received a Schedule K-1 from a partnership on Sept. 15 and then had to immediately incorporate its items into the Form 1120 filing that was due that day. Although changes to the extended due dates for partnership and trust returns made in 2009 helped some individual taxpayers, the existing due dates still put an undue burden on many individual and corporate taxpayers.
What Is the Impact?
By staggering the due dates, thus accelerating the distribution of passthrough information to before the due date of the individual and corporate shareholder/partner returns, the taxing authorities have sought to incorporate adequate lead time into the tax filing process. Although the extended due dates for corporate and partnership returns with a calendar tax year remain Sept. 15f or the time being, the long-term solution of extending the due date for C corporations to Oct. 15 is now in place for tax years beginning after Dec. 31, 2025.
Conclusion
The enactment of the Surface Transportation Act brought changes to the tax filing process that will affect most, if not all, taxpayers. Taxpayers should pay particular attention to these revised due dates, as well as the potential impact on state filings. While the exhibits refer to a number of the significant deadline changes, taxpayers and tax professionals should review the act in full detail to see which other federal filings are affected.
EditorNotes
Kevin Anderson is a partner, National Tax Office, with BDO USA LLP in Washington.
For additional information about these items, contact Mr. Anderson at 202-644-5413 or kdanderson@bdo.com.
Unless otherwise noted, contributors are members of or associated with BDO USA LLP.
