ComplianceFinanceMay 07, 2020

Filing a federal extension? Don't forget about your state return

With less than a week remaining in the 2012 federal tax filing season, many people are scrambling to get their returns completed. State tax filing deadlines are also looming, unless you are fortunate enough to live in a state without a personal income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming.)

In nearly all of the states that do impose a personal income tax, the state return is due on the same day as the federal return. The following few states are exceptions to that rule:

  • Delaware. Return due on April 30 (or 30th day of 4th month after close of fiscal year)
  • Hawaii. Return due on April 20th (or 20th day of 4th month after close of fiscal year)
  • Iowa. Return due on April 30th (or last day of 4th month after close of fiscal year)
  • Louisiana. Return due on May 15th (or 15th day of 5th month after close of fiscal year)
  • Virginia. Return due on May 1st (or 15th day of 4th month after close of fiscal year)

State extension requirements vary widely

In many cases, you may need to obtain an extension of time to file your federal taxes. For example, this is frequently the case if you need Schedule K-1s from pass-through entities.

If you are requesting a federal extension, you are most likely going to need a state extension as well, and the procedures that you must follow vary widely from state to state. Nearly all states follow the federal government's lead and allow an automatic six-month extension of time to prepare and file your tax return. Notable exceptions are Indiana and New Hampshire: Both states grant filers an automatic seven-month extension.

Not only do most states follow the federal government in granting automatic six-month extensions, many of them accept the federal extension form (Form 4868) in lieu of a state tax form and a significant number do not require any extension form to be filed with the state, if a valid federal extension has been filed.

Work smart

Although a significant number of states accept the federal extension, most permit extensions to be filed on a state-provided form. Using the state form is necessary if you are seeking an extension only for your state tax return. If you are seeking a state-only extension, make sure you know the length of the extension. The extension period for a state-only extension may be less than the amount of time you receive if you extend both your federal and state taxes.

Payment deadlines are not extended

An extension of time to file is not an extension of time to pay your tax bill. This rule applies at the state level as surely as it does at the federal level. Slightly more than half the states require that you pay 100 percent of the amount you owe on your original return. (In fact, some states condition the validity of the extension upon 100-percent payment of tax by the due date.)

The following states are satisfied with less than the full payment when you file for an extension.

Amount of Tax Due When Extension is Filed

State Percentage Required State Percentage Required
Colorado 90% Connecticut 90%
Idaho 80% Indiana 90%
Iowa 90% Kansas 90%
Kentucky 75% Maine 90%
Minnesota 90% Montana 90%
New Jersey 80% New York 90%
North Carolina 90% Ohio 90%
Oklahoma 90% Oregon 90%
South Carolina 90% Utah 90%
Virginia 90%    

If you need to make a tax payment, then you are going to have to file the appropriate form with the state, although an increasing number of states permit you to pay online. Because the penalties for failure to file are often higher than the penalties for failure to pay, you should definitely file your return or an extension even if you cannot come up with the money for the tax bill. In this case, you should contact your state department of revenue and determine what payment options are available to you.

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