Texas provides guidance for EFT payer franchise tax extensions (authored by RSM US LLP)

Jul 21, 2020

TAX ALERT | July 16, 2020

Authored by RSM US LLP

The Texas Comptroller of Public Accounts has issued guidance in the July edition of Texas Tax Policy News explaining the state’s procedures for mandatory electronic payers to request a second extension for 2020 franchise tax report purposes, and to pay any additional tax due. Mandatory electronic payers that properly secured a first extension may request a second extension on or before Aug. 17, 2020 (extended from Aug. 15, 2020, which is a Saturday). The second extension allows such taxpayers to defer filing their 2020 Texas franchise tax report until Jan. 15, 2021 pursuant to the state’s coronavirus pandemic relief provisions.

The procedure for filing a second extension request depends upon whether 100% of the tax to be due with the annual report was paid with the first extension. If all tax to be due was previously paid, a taxpayer may use the state’s Webfile system or submit Form 05-164, Texas Franchise Tax Extension Request, to request a second extension. If all tax to be due was not previously paid, a taxpayer must use the Webfile system or TEXNET to request the second extension and pay the difference between the total tax due on the annual report to be filed on or before Jan. 15, 2021 and amounts previously paid.

Please be aware that, if taxpayers elect or are required to use TEXNET to file second extension requests and pay additional tax, the system requires payment processing lead time. A TEXNET payment of $25,000 or less must be scheduled by 10:00 am CT on the due date. A TEXNET payment above $25,000 must be scheduled by 8:00 pm CT on the business day before the due date, which is Aug. 14, 2020. When initiating EFT payments through Webfile or TEXNET, taxpayers should consider initiating at least one business day before they are due to avoid automatic notices because of system recording or transfer delays.

Taxpayers intending to request a second extension for their 2020 Texas franchise tax report should consult with their tax advisers and properly schedule their filing and payment requirements.

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This article was written by RSM US LLP and originally appeared on 2020-07-16.
2020 RSM US LLP. All rights reserved.

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The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.



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