Legislative / Regulatory | Taxation

MACPA supports legislation to align Maryland with new federal C-corp tax due date

Earlier this week, Jerry Beard, CPA, chairman of the MACPA’s State Tax Committee, testified before the Maryland Senate’s Budget and Tax Committee in support of Senate Bill 288, which would align Maryland’s due date for C corporation returns with the new federal due date for those returns. (Pictured from left are Beard, MACPA CEO Tom Hood, and Nick Manis of Mannis, Canning and Associates.)


Beard, a supervisor at Ellin & Tucker, explained that the Internal Revenue Service changed the due dates of various pass-through entities’ federal tax returns to allow a more timely flow of information to individuals, as that information must be incorporated into individual returns. Effective with tax years beginning after Dec. 31, 2015 (tax year 2016), the federal due dates for partnerships and trusts have moved from April 15 to March 15; the due date for S corporation returns remains at March 15.


“This due date change allows the pass-through income information to be available by the initial filing date of April 15 for individuals,” said Beard. He added that the due dates for pass-through returns filed under an extension will also now be due one month prior to the extended due date for individual returns.


Given the changes described above, “In order to balance the workload for the IRS, taxpayers and practitioners, the C corporation due date has been moved from March 15 to April 15,” explained Beard.


“For most returns, the starting point for the Maryland returns has been federal taxable Income,” he continued. "There are calculated additions and subtractions in order to arrive at Maryland taxable income. ...  Unless the due date is changed from March 15 for Maryland C corporations to April 15, the Maryland return would be due one month before the federal return is due. We would then have a situation where we may have to estimate the Maryland income without having a federal baseline to calculate from. Overall, the due date for Maryland returns could always be the same as or later than the federal due date but should never be earlier than the federal due date.”


Beard concluded by recommending passage of SB 288 to align the Maryland corporate return due date with the new federal due date of April 15.


The MACPA supports SB 288 with an amendment to move the effective date of the bill from "applicable to all taxable years beginning after Dec. 31, 2016," to "applicable to all taxable years beginning after Dec. 31, 2015." This will ensure Maryland is aligned with the federal implementation date applicable to 2016 tax returns prepared dufing the 2017 tax filing season.


Read the full text of SB 288 and companion bill HB 484.


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