Tax Provisions in Highway Act Signed Into Law by President Obama

In late July, President Obama signed into law H.R. 3236, which is also known as the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.”

This legislation extends the authority and funding for the Department of Transportation’s surface transportation programs and transfers $8.1 billion from the Treasury General Fund to the Highway Trust Fund through October 29, 2015.

The new law also includes changes to the filing deadlines for a number of types of tax returns. These changes generally begin for tax years beginning in 2016. Here are some more insights on these new deadlines from a recent RIA Checkpoint client letter:

  • Partnerships and S corporations will have to file their returns by the 15th day of the third month after the end of the tax year. Thus, entities using a calendar year will have to file by Mar. 15 of the following year. In other words, the filing deadline for partnerships will be accelerated by one month; the original filing deadline for S corporations stays the same. By having most partnership returns due one month before individual returns are due, taxpayers and practitioners will generally not have to extend, or scurry around at the last minute to file, the returns of individuals who are partners in partnerships.
  • C corporations will have to file by the 15th day of the fourth month after the end of the tax year. Thus, C corporations using a calendar year will have to file by Apr. 15 of the following year. In other words, the filing deadline for C corporations will be deferred for one month.

The due date for filing FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) for taxpayers with a financial interest in or signature authority over certain financial accounts is accelerated from June 30th to April 15th. The law adds a provision allowing for a maximum extension to file until October 15th. Under current law, no extension of time to file was allowed.

Exempt organizations and certain trusts returns can now file for an automatic six-month extension to file.   Under current law, the automatic extension is for a three-month period.

The law also provides resource flexibility to the Department of Veterans Affairs for health care services and makes a number of changes to the Veterans Access, Choice and Accountability Act, as highlighted in this White House statement. It also overrules the Supreme Court’s Home Concrete decision, and requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries.

In addition, employee benefit plans filing Form 5500, Annual Return/Report of Employee Benefit Plan, will now be able to extend their filing deadline for 3 ½ months.  Currently, plans can only extend their filing deadline for 2 ½ months.

“This legislation has adjusted the due dates for certain business returns which will impact the 2017 filing season,” said Jim Wilhelm, a Tax Director at SC&H Group. “Some of these changes have been advocated by the AICPA for years in an effort to better align the timing of when K-1s from partnerships are received by corporate and individual partners, and perhaps reducing the number of returns that need to be extended, amended, etc.  Also of note, the annual FBAR filing will be due April 15th starting in 2017, versus the current due date of June 30.”

SC&H Group’s Tax Services team understands the unique economic and regulatory environments – such as this legislation — that can impact your financial performance and your tax burden. Please contact the SC&H Group Tax Services team here for more insights into this new law.