United States

Calendar year C corporations will get six-month extension

Extended due date for calendar year C corporations is Oct. 16

TAX ALERT  | 

On Feb. 8, the IRS announced that it has released the instructions for Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, and is granting an automatic extension of six months (to Oct. 16, 2017) for calendar year C corporations that timely request the automatic extension. In the announcement, the IRS clarified that a six-month extension is available for calendar year C corporations to file their 2016 returns, as stated in the revised instructions to the form that were released.

Background

In the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Act) that was signed into law on July 31, 2015, the due dates were modified for many common tax forms for taxpayers whose tax years begin after Dec. 31, 2015. For C and S corporations, the original due date was the fifteenth day of the third month following the close of the corporation's year, with an automatic six-month extension available to file the tax return. For partnerships, the original due date was the fifteenth day of the fourth month following the close of the partnership’s year with an automatic five-month extension available to file the tax return. Under the Act, the due dates were modified so that S corporations and partnerships are now due the fifteenth day of the third month following the close of the corporation or partnership's year, respectively, with an automatic six-month extension available to file the tax return. Under the Act, C corporation returns are due on the fifteenth day of the fourth month following the close of the corporation's tax year with an automatic five-month extension available. However, the IRS announcement and the revised instructions to the Form 7004 replace the available five-month extension with a six-month extension, if requested.

Conclusion

With the change of the due dates, there has been some confusion and concerns with regards to calendar year C corporations and the extended due date of such returns to only allow for a five-month extension of time to file. In recently updated instructions for Form 7004, the IRS has assured taxpayers that calendar year C corporations are allowed a six-month extension of time to file under section 6081(a) as opposed to the five-month extension of time to file under section 6081(b) that was originally communicated. With this clarification from the IRS, it is now clear that calendar year C corporations with a tax year ending Dec. 31,2016, have an original due date of April 15, 2017, with an extended due date of Oct. 16, 2017, as opposed to Sept. 15, 2017.

Fiscal-year C corporations ending on June 30, are still eligible for an automatic seven-month extension and other fiscal-year C corporations are eligible for an automatic six-month extension of time to file their tax returns.

AUTHORS


Subscribe to Tax Alerts



How can we help you with your tax planning & compliance?