26 September 2016 California legislation conforms to change in federal return due dates — with a twist On September 14, 2016, Governor Brown signed AB 1775, which changes the due dates for filing California tax returns for most partnerships, corporations and limited liability companies to be consistent with changes to the federal due dates that are effective for tax years beginning in and after 2016.1 Effective for tax years beginning on and after January 1, 2016, changes to the California tax return due dates are as follows:
* Refers to a date following the close of the tax year AB 1775 makes corresponding changes to the payment due dates for taxes and fees due by the original return due date. AB 1775 does not change the periods for extensions. Corporations will continue to have extensions of time to file not to exceed seven months and partnerships will have extensions of time to file not to exceed six months. Historically, most California tax returns had extended due dates as of the 15th day of the 10th month after the close of the tax year. For corporations and partnerships, the California extended due dates were one month following the federal extended due date. Unlike the federal changes, AB 1775 only addresses the original due dates of returns and does not alter the extension periods. For tax years beginning in and after 2016, even though the federal and California original due dates are consistent, the federal and California extended due dates for partnership returns also will be consistent. Under these changes, partnerships will lose the benefit of filing their California returns one month after the federal due date and instead, will have to file their California returns on the same date as the federal extended due date. Another result of the enactment of AB 1775 is extending the California corporate return filing season by another month. See the chart below (with the due date following the close of the taxpayer's tax year):
Unlike federal reporting rules, California also requires single member LLCs (SMLLCs) to file their own returns. The California filing requirements for SMLLCs are unique. Rather than impose the same return due date, including extensions, for all SMLLCs, each SMLLC must follow the return due date of its single owner (as established under AB 1775). CAUTION: Tax return preparers must consider the type of taxpayer owning the SMLLC in order to determine the correct due date for filing the SMLLC returns and the last day to pay the California LLC tax and the LLC fee for the SMLLC. Remember, the LLC fee paid during the tax year may be a reasonable estimate, but the full fee must be paid by the original due date of the LLC return.
1 Federal legislation (Section 2006(a)(3)(B) of HR 3236, the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015" enacted as P.L. 114-41) defers implementation of the return due date for corporations with fiscal years ending June 30 until 2026. Document ID: 2016-1617 | ||||||||||||||||||||||||||||||||||||||||
