Changes in Longstanding Tax Return Due Dates Impact Retirement Plan Contribution Dates
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Summary
Certain tax return and extension due dates will change for taxable years ending on or after December 31, 2016, based on provisions included in the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 that was signed into law on July 31st, 2015. The changes represent years of lobbying by The American Institute of CPAs to have a more logical flow of tax return due dates, especially to have pass-through entity returns and the resulting Form K-1s due before individual and corporate tax returns affected by the information.
Details
New Due Dates
The main change is that partnership tax returns are due a month earlier, while most C Corporation tax returns are due a month later.
CAUTION: Special Circumstance Apply to Certain C Corporation Returns with a June 30th year end.
Even though these changes will prove to be useful, there are a few oddities that confuse when a Form 1120 for C Corporations are due. In order to balance the bill’s impact on tax revenue over a ten year period, C Corporations have a number of due dates to keep track of depending on the year end of the corporation.
The table below highlights the new and existing original and extension due dates by form type.
| Return |
Current Due Dates |
New Due Dates |
Notes |
Individual,
Form 1040 |
April 15th
Extendable to October 15th |
April 15th
Extendable to
October 15th |
No changes |
Partnership,
Form 1065 |
April 15th
Extendable to September 15th |
March 15th
Extendable to September 15th |
Fiscal year partnerships will have a due date the 15th day
of the 3rd month after year end with a six-month extension |
| S Corporation, Form 1120S |
March 15th
Extendable to September 15th |
March 15th
Extendable to September 15th |
No changes for S Corporation entities |
C Corporation with a 12/31 Year End,
Form 1120 |
March 15th
Extendable to September 15th |
April 15th
Thru 2025:
Extendable to September 15th
2026 and thereafter: Extendable to October 15th |
The extension due date for calendar year-end C Corporations will
remain the same through 2025 and then change by a month in 2026 |
| C Corporation with a 6/30 Year-End, Form 1120 |
September 15th
Extendable to March 15th |
Pre-2026: September 15th
Post-2026: October 15th
|
C Corporations with 6/30 year ends will not have their original due date change until 2026 |
C Corporation with All Other Year-Ends,
Form 1120 |
15th day of 3rd month after year-end
Extendable to the 15th day of 9th month after year-end |
15th day of 4th month after year- end
Extendable to the 15th day of 10th month after year- end |
For C Corporations with year-ends other than 12/31 or 6/30 |
Trusts & Estates,
Form 1041 |
April 15th
Extendable to September 15th |
April 15th
Extendable to September 30th |
Trusts and estate returns will have a 5 ½ month extension |
| Exempt Organizations, Form 990 |
May 15th
Extendable to
August 15th
Second extension to November 15th |
May 15th
Extendable to November 15th |
Instead of two three-month extensions, Exempt Organizations will have one six-month extension |
BDO Insights
No plan sponsor who relies on its extended tax return to determine the payment requirement will have an earlier deadline under these new rules. Partnerships that file the Form 1065 without extension will need to pay retirement plan contributions one month earlier than the current rules allow.
Background and Authority
Sponsors of qualified retirement plans rely heavily on a special rule that allows them to deduct contributions made next year on this year’s income tax return. The general deduction rule that requires accrual basis taxpayers to pay amounts within 2 1/5 months following the year end in order to deduct on the current year’s return, is trumped by IRC 404 that governs all deductions for contributions of an employer to an employees’ trust. Specifically, IRC section 404(a)(6) provides the following:
"Time when contributions deemed made. For purposes of paragraphs (1), (2) and (3), a taxpayer shall be deemed to have made a payment on the last day of the preceding taxable year if the payment is on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof)."
Therefore, the aforementioned changes to the tax return due dates affect the timing of the employer deductions.
For more information on your exposure the ERISA Title I penalties and the increased amounts, please contact:
Joan Vines
Senior Director, National Tax
Compensation & Benefits |
Carl Toppin
Senior Manager, National Tax
Compensation & Benefits |
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Kim Flett
Managing Director, National Tax
Compensation & Benefits |
Andy Gibson
Regional Managing Partner
Tax Services |
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Alex Lifson
STS GES Principal
Compensation & Benefits |
Penny Wagnon
Senior Director
Compensation and Benefits |
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