Automatic 30-day penalty relief for 2017 extended corporate income tax return filing

October 3, 2018 Modified: November 7, 2018

The AICPA wants to bring to your attention the challenges CPAs and firms are facing with the upcoming corporate filing deadline.  Some CPAs (and other organizations – COST, TEI and FTA) have suggested guidance is needed for penalty and filing relief for 2017 state corporate income tax returns.  Impacted state CPA societies may want to consider working with their tax authority to adopt the attached draft guidance.  The AICPA supports this effort and wanted to share this draft guidance with you as a resource.  It would provide an additional month for filing extended state corporate income tax returns for 2017 returns only.  This guidance would not impact the tax payment deadline, and therefore, would not impact state revenue. 

The reason CPAs are seeking relief is because implementation of the Tax Cuts and Jobs Act (TCJA)) is still in process.  The late, and potential lack of, guidance from state authorities has resulted in added compliance complexities for 2017 corporate income tax returns.  Once the federal return is filed, additional time is needed to consider and calculate state allocation and apportionment issues before the taxpayer can file the state corporate income tax return.  If filing relief is not provided, taxpayers may need to file 2017 returns based on estimates and then file amended returns.  State tax authorities would need to process multiple returns for these corporations.

Impacted state CPA societies may want to consider working with their state tax authorities to request that they consider appropriate guidance.  This sample bulletin is available for your use in this process.

Potentially impacted state CPA societies include:  Alabama, Arizona, Arkansas, California, Colorado, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Massachusetts, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Rhode Island, South Carolina, Tennessee, Utah, and West Virginia. 

There is a summary chart of states’ responses on this issue. In particular, the New Jersey and Kansas Departments of Revenue are providing the requested automatic 30-day penalty relief for corporation business tax filing due October 15, 2018. In October 2018, Alabama, DelawareIllinois, and Missouri posted announcements providing that they will grant relief on a case-by-case basis provided the corporate tax returns are filed on or before November 15, 2018 and the taxpayer requests in writing abatement of late filing penalties due to reasonable cause. If you would like more information or support with this effort, contact: