Practice and Procedure: Delaware Grants Income Tax Filing Extension to C Corporations and Announces Upcoming Changes

As we enter the 2016 tax filing season, many states are issuing forms and providing guidance on return due dates and filing requirements. But some states have been scrambling to clarify when state corporate income tax returns are due, based on changes in the federal due dates. Delaware is one state that has issued special guidance for the 2016 tax year, to help taxpayers as they prepare their returns this year.

A little background: In 2015, Congress passed Pub. L. No. 114-41, amending the filing due dates for federal returns of C corporations and partnerships for tax years beginning after Dec. 31, 2015. Returns for C corporations are now due April 15 instead of March 15; partnership returns are due March 15 instead of April 15. The due date for C corporations following a fiscal year ending June 30 will change to Oct. 15 beginning in 2026.

For Delaware, the decision on whether to conform to the federal changes or keep its current due dates has proven to be a bit complicated. The Delaware General Assembly did not pass legislation last year amending its income tax laws to match the federal due dates. That meant that corporate income tax returns for C corporations would be due April 1, before federal income tax returns. S corporation and partnership returns would be due later than their corresponding federal returns.

But earlier this year, the Delaware Division of Revenue (DOR) published a list of filing due dates and announced that beginning with the 2016 tax year, the due dates for business entities would change as follows, to conform to the federal dates:

  • C corporations
    - New Due Date – April 15
    - Old Due Date – April 1
  • S corporations
    - New Due Date – March 15
    - Old Due Date – April 1  
  • Partnerships
    - New Due Date – March 15
    - Old Due Date – April 30

Thus, C corporation returns would be due later in the year, and S corporation and partnership returns would be due earlier.

However, these changes were short lived, at least for S corporations and partnerships. On Feb. 14, the Delaware DOR announced that the filing dues dates for partnerships and S corporations would remain the same for the 2016 filing season. The DOR also granted an automatic filing extension to C corporations to match the federal due date. Accordingly, C corporation returns for calendar year filers are due April 15, S corporation returns are due March 30, and partnership returns are due April 30 for the 2016 filing season.

Delaware business entities should be prepared for the enactment of legislation later this year that will, conform the state’s due dates to the new federal due dates for tax years beginning after Dec. 31, 2016.

But for now, Delaware business entities can enjoy having more time to file their state tax returns. The Delaware return due dates, for tax year 2016, are:

  • C corporations – April 18, 2017 (April 15 falls on a Saturday this year and April 17 is Emancipation Day, a federal holiday)
  • S corporations – March 30, 2017

  • Partnerships – May 1, 2017 (April 30 falls on a Sunday this year)

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Should state and federal return filing due dates be the same?

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