The short-term highway funding extension was signed into law on Friday, July 31, 2015. The bill modifies the due dates for several commonly filed income tax returns.
- For partnership income tax returns, the new due date is March 15 for calendar-year partnerships and the 15th day of the third month following the close of the fiscal year for fiscal-year partnerships. Currently, these income tax returns are due on April 15, for calendar-year partnerships. The act directs the IRS to allow a maximum extension of six months for Forms 1065, U.S. Return of Partnership Income.
- For C corporation income tax returns, the new due date is the 15th day of the fourth month following the close of the corporation’s tax year. Currently, these income tax returns are due on the 15th day of the third month following the close of the corporation’s tax year. Corporations will be allowed a six-month extension, except that calendar-year corporations would get a five-month extension for Forms 1120, U.S. Corporation Income Tax Return.
The new due dates will apply to partnership and C corporation income tax returns for tax years beginning after December 31, 2015. However, for C corporations with fiscal years ending on June 30, the new due dates will not apply until tax years beginning after December 31, 2025.
These new due dates are generally ones that the AICPA and state CPA societies have been advocating for several years to create a more logical flow of information and help taxpayers and tax professionals in filing timely and accurate income tax returns. Under the current due dates, taxpayers and practitioners often have insufficient time to prepare income tax returns because required information from a flow-through business entity is not available before the taxpayer’s individual income tax return is due.
This is a much welcomed change for everyone.