California ~ Corporate, Personal Income Taxes: Guidance on Filing Extensions Issued

CCH Tax Day Report

The California Franchise Tax Board (FTB) issued guidance concerning extensions for filing corporation income tax returns for taxable years beginning on or after January 1, 2016. Legislation enacted in 2016 conformed California law to federal laws changing the original due date for C corporation returns from the 15th day of the third month following the close of the taxable year to the 15th day of the fourth month following the close of the taxable year.

For taxable years beginning on or after January 1, 2016, the FTB will keep the extended due date for C corporations and limited liability companies (LLCs) taxed as C corporations as the 15th day of the tenth month following the close of the taxable year. As a result, the FTB will allow an automatic six-month extension to file a return without the need to file a written request if the return is filed within six months of the original due date. The six-month extension period applies to all taxpayers in good standing filing Forms 100 (including REITs, REMICs, and RICs), 100W, and 100S; and to taxpayers in good standing filing forms 109 and 199. The granting of the extension is conditioned on the filing of a return within the automatic extension period.

The extended filing due date for S corporations will be the 15th day of the ninth month after the close of the tax year. The extended filing due date for exempt organizations will be the 15th day of the eleventh month after the close of the tax year. The extended filing due date for employee’s trusts (IRC 401(a)) or IRAs will be 15th day of the tenth month following the close of the tax year. The extended filing due date for cooperative associations will be the 15th day of the 15th month following the close of the tax year.

For taxable years beginning in 2016 to 2025, the extension period for a short period C corporation return for a period ending June 30, which is required to be filed on the 15th day of the third month following the close of the taxable year, will be seven months, so the extended due date remains the 15th day of the tenth month following the close of the tax year.

The automatic paperless extension granted to individuals and entities subject to the personal income tax law continues to be six months. For taxable years beginning on or after January 1, 2016, the 2016 legislation changes the original due dates for partnerships, LLCs taxed as partnerships, and single member LLCs (SMLLCs) owned by a pass-through entity to the 15th day of the third month following the close of the tax year and the extended filing due date will be the 15th day of the ninth month following the close of the tax year. For SMLLCs not owned by pass-through entities, the original filing date will be the 15th day of the fourth month following the close of the taxable year and the extended filing due date will be the 15th day of the tenth month after the tax year.

Subscribers can view the notice.

FTB_Notice_2016-04

Notice 2016-04, California Franchise Tax Board, November 4, 2016

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