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New Highway Trust Fund Law Brings New Deadlines, Requirements for Businesses

September 18, 2015

Andrew S. Lattimer, CPA, MST

On July 31, 2015, President Obama signed into law the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.” Although primarily designed as a three-month stopgap extension of the Highway Trust Fund and related measures, tucked inside this new law are a number of important tax provisions which impact partnerships and C corporations. Anyone who owns or manages such a business should be made aware of these changes.

Revised Due Dates for Partnership and C Corporation Returns

Currently, domestic corporations, including S corporations, must file their returns by the 15th day of the third month after the end of the tax year.  Meanwhile, partnership tax returns are due on the 15th day of the fourth month after the end of the partnership's tax year. Since the partnership return date is the same as for individuals, those taxpayers holding partnership interests often must get an extension to file their returns because their Schedule K-1s don't arrive until the last minute.

This new law changes the due dates of entity tax returns. The law is effective generally for returns for tax years beginning after December 31, 2015:

  • Both partnerships and S corporations will now have to file their returns by the 15th day of the third month after the end of the tax year; thus, those with a calendar year will have to file by March 15 of the following year. This accelerates the filing of partnership returns by one month.
  • C corporations will have to file by the 15th day of the fourth month after the end of the tax year; thus, those with a calendar year will have to file by April 15 of the following year.  This pushes the due date of C corporations back by a month.
  • For C corporations with fiscal years ending on June 30, the change won't apply until tax years beginning after December 31, 2025.

Revised Statutory Automatic Extension Rules for Corporations

Effective generally for returns for tax years beginning after December 31, 2015, the three-month automatic extension of time is changed to an automatic six-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 is five months, rather than six months. Finally, 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 seven months, rather than six.

Revised Extended Due Dates for Many Returns

Effective for returns for tax years beginning after December 31, 2015, the new law has the following modifications.

  • The returns of partnerships filing Form 1065 will be a six-month period ending on September 15 for calendar year taxpayers, rather than the current five months.
     
  • The returns of trusts filing Form 1041 will be a 5 ½-month period ending on September 30 for calendar year taxpayers, rather than the current five months.
  • The returns of employee benefit plans filing Form 5500 will be an automatic 3 ½-month period ending on November 15 for calendar year plans, rather than the current 2 ½ months.
  • The returns of organizations exempt from income tax filing Form 990 will be an automatic six-month period ending on November 15 for calendar year filers, rather than the current three months.
  • The returns of organizations exempt from income tax that file Form 4720 will be an automatic six-month period beginning on the due date for filing the return, without regard to any extensions. This replaces the current three-month period.
  • The returns of trusts required to file Form 5227 (Split-Interest Trust Information Return) will be an automatic six-month period beginning on the due date for filing the return, without regard to any extensions. This replaces the current three-month period.
  • The filing of Form 6069 will be an automatic six-month period beginning on the due date for filing the return, without regard to any extensions. This replaces the current three-month period.
  • A taxpayer required to file Form 8870 (Information Return for Transfers Associated With Certain Personal Benefit Contracts) will be an automatic  six-month period beginning on the due date for filing the return, without regard to any extensions. This replaces the current three-month period.

Businesses and individuals need to be aware of these new deadlines and requirements moving forward. As with most aspects of running a business, preparing for these procedural obligations now will benefit them in the long run.

Andrew S. Lattimer, CPA, is a partner with BlumShapiro, the largest regional business advisory firm based in New England, with offices in Connecticut, Massachusetts and Rhode Island. The firm, with over 400 professionals and staff, offers a diversity of services that includes auditing, accounting, tax and business advisory services.

In addition, BlumShapiro provides a variety of specialized consulting services such as succession and estate planning, business technology services, employee benefit plan audits and litigation support and valuation. The firm serves a wide range of privately held companies, government and non-profit organizations and provides non-audit services for publicly traded companies.

Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein.  Such content, comments, or advice may be based on tax statues, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities.  This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law.

 

Advisors | Auditors | Consultants | CPAs - Blum Shapiro is one of the premier public accounting firms in the northeast and a Top 100 CPA Firm in the U.S. Our professionals serve businesses, individuals and organizations in Boston (MA), Hartford (CT), Cranston (RI), Shelton (CT) ,Quincy (MA) and Newton (MA) with audit, tax and business consulting services. Our firm has developed practice areas in automotive, construction, education, government, healthcare, hospitality, manufacturing, nonprofit organizations and professional service firms. New Haven CT, Fairfield CT, Norwalk CT, Waterbury CT.