Mass. waiving fees for some business filings
As accountants continue to advocate for the state to adjust its tax code to conform with recent changes at the federal level, the Department of Revenue announced Thursday it anticipates waiving fees racked up due to issues caused by the non-conformity.
Under a new federal structure, filings for partnerships and S corporations are due March 15 and individual and C corporation returns are due on April 15, creating a workflow in which investors will have information from partnership filings before having to file individual or C corporation returns.
But Massachusetts is one of two states that does not conform to the new federal due dates, instead requiring C corporations to file with S corporations on March 15. Wisconsin is the only other state where the due dates do not conform and the Legislature has taken no action to bring them into alignment, according to the American Institute of CPAs.
Because individuals and C corporations would have all the information from the March 15 filings, their own filings will be more accurate and more likely completed on time, accountants say. Fewer returns being filed using estimated figures will ultimately give the state a clearer picture of revenue collection, they say.
With tax season heating up, and the state deadline for C corporations and S corporations to file approaching, complications of the state's non-conformity are popping up.
"Massachusetts not jumping on board with these changes creates a couple of issues," Kate Seekell, a CPA and principal at Kurzman, Dempsey & Kowalker, LLP in Canton, said.
One issue is education, Seekell said, trying to alert clients to the changes at the federal level and the discrepancy those changes created for state filings. For some clients, the discrepancy means their taxes may not be done as soon as they are used to, she said. For others, the state's non-conformity will result in a higher bill from their tax preparer.
"Taxpayers who use tax preparers like CPAs may incur additional accounting fees because if we have to estimate some number for extension purposes, they're going to incur additional time and perhaps cost for filing that additional extension," Seekell said.
Despite the headaches the system is causing this tax season, Seekell said she was happy to learn from DOR that they plan on waiving late fees, giving corporate taxpayers the flexibility to time their state return to their federal return.
"In the interest of efficient tax administration and in order to ease compliance for taxpayers, the Department of Revenue generally anticipates waiving any late-file penalties imposed ... in connection with a C corporation tax return that is filed after the applicable due date ... but on or before the due date for the corporation's federal tax return," Revenue Commissioner Michael Heffernan wrote in the notice from DOR.
A DOR official said the department uses the "generally anticipates" language to preserve its ability to respond to and act on situations that do not fit with the intent of the penalty relief.
Heffernan said DOR's relief is intended to address the immediate consequences of the state's non-conformity with the federal tax code, but that Gov. Charlie Baker's most recently-filed supplemental spending bill includes language that would bring Massachusetts into lockstep with the new federal deadlines beginning in January 2018.
The supplemental budget, filed Feb. 21, is pending before the House Ways and Means Committee.
"The tax filing deadline language included in the supplemental budget filed by Governor Baker is being reviewed by the Committee," committee spokesman Chris Bennett said in an email. "We are assessing any costs that could be associated with the proposed changes and determining their fiscal impacts."
Last session, a bill filed by the chairmen of the Joint Committee on Revenue to conform Massachusetts filing deadlines with the federal ones died of inaction about two months after it was referred to House Ways and Means.
Rep. Jay Kaufman, the House chair of the Revenue Committee, has filed another bill this session to effectuate the change, as has Republican Rep. Keiko Orrall. Both bills have attracted bipartisan support.
WBJ Web Partners
Most Recent
Most Recent
0 Comments