MA DOR Proposes New Due Dates for S Corporations Included in a Combined Group

MA DOR Proposes New Due Dates for S Corporations Included in a Combined Group

There is good news on the horizon for S Corporations included in a combined group reporting in Massachusetts.  Regarding their return due date, there is a Proposed Regulation at the Massachusetts Department of Revenue which is on the schedule for Public Hearing on January 23, 2018.

CURRENT:
Concerning due dates, current Massachusetts law conforms with federal tax law.  For tax returns due after January 1, 2018, a business corporation that is not an S Corporation is required to file on the 15th day of the fourth monthfollowing the close of its taxable year.

However, if there is an S Corporation part of the combined group, there will be a discrepancy because the S Corporation due date is the15th day of the third month following the close of its taxable year.

PROPOSED:
The proposed Massachusetts regulation says an S Corporation that is a taxable member of the combined group may file on the 15th day of fourth month together with the combined group.  This includes reporting of the non-income measure of corporate excise.  This will eliminate the reporting deadline discrepancy and conform the combined group due dates in Massachusetts.

CAUTION:
This extended due date will NOT apply (still is 15th day of 3rd month) if:

  1. S Corporation is not part of a combined group.
  2. S Corporation has different taxable year than combined group and is reporting the non-income measure of corporate excise.
  3. Informational return, 355S including Schedule S and SK-1.

This proposed Massachusetts regulation when implemented would be effective for returns due on or after January 1, 2018, and thus would apply to calendar year 2017 filers and fiscal year groups who file in 2018.  We here at Kevin P. Martin and Associates, P.C. see no reason why this regulation would not be implemented.

While all of the media’s attention has been focused on the new federal law, the “Tax Cuts and Jobs Act,” in our home state the Massachusetts Department of Revenue has been active in setting its own precedential rulings and regulations. Our firm has over 50 years of experience putting business ideas to work by advising organizations like yours.  We welcome the opportunity to discuss the implications of these new Massachusetts tax issues to your business.