Earlier this week, the IRS announced that the deadline for filing and paying various federal income taxes was postponed until June 15, 2021 for Texas residents and businesses (See “Whitley Penn Tax Alert: IRS Announces Tax Relief for Texas Storm Victims” dated February 22, 2021). Yesterday, the Texas Comptroller announced that the due date for 2021 franchise tax reports and payments has been postponed from May 15, 2021 to June 15, 2021 for all taxpayers. The postponement is automatic and no extension forms are required to be filed.
Franchise taxpayers who need an extension beyond the June 15, 2021 due date have the following options:
- Non-EFT Taxpayers – Taxpayers who are not required to pay tax by electronic funds transfer (“non-EFT Taxpayers”) may file an extension request on or before June 15, 2021 and must make an extension payment by that date equal to the lesser of 90% of the tax due for the current year or 100% of the tax reported on their prior year report. Non-EFT taxpayers who request an extension on or before June 15, 2021 will have until November 15, 2021 to file their franchise tax report and pay the remainder of the tax due. The 100% of prior year tax option is not available to a taxpayer that either became subject to the franchise tax during 2020 (or did not have a report due during 2020) or was included in a combined group in 2020 but is filing a separate entity report in 2021.
- EFT Taxpayers – Taxpayers who are required to pay tax by electronic funds transfer (“EFT Taxpayers”) may file an extension request on or before June 15, 2021 to extend the due date until August 15, 2021. EFT taxpayers must make an extension payment by June 15, 2021 equal to the lesser of 90% of the tax due for the current year or 100% of the tax reported on their prior year report. EFT Taxpayers may request a second extension of time to file their report on or before August 15, 2021 and must pay the remainder of the amount of 2021 tax due by that date. The August 15, 2021 filing extends the final report due date to November 15, 2021. Any payments made after August 15, 2021 will be subject to penalty and interest. The 100% of prior year tax option is not available to a taxpayer that either became subject to the franchise tax during 2020 (or did not have a report due during 2020) or was included in a combined group in 2020 but is filing a separate entity report in 2021.
Whitley Penn is continually monitoring the tax and economic developments related to the coronavirus pandemic and will send out additional alerts in the future. In the interim, please contact your Whitley Penn tax advisor if you have any questions or require any additional information.