Extended Texas Deadlines

Texas Franchise

Due to the recent winter storm and power outages in Texas, the Comptroller’s Office has automatically extended the due date for the 2021 Franchise Tax reports from May 15th to June 15th. This corresponds with the IRS announcement that all Texas residents and businesses will have an automatic extension for filing and payments for their federal returns until June 15th.

Texas businesses will not need to file any additional forms to receive the extension to June 15th, as the extension is automatic and does apply to all franchise taxpayers. Franchise taxpayers that need additional time beyond June 15th and are non-electronic funds transfer taxpayers, can request an extension prior to June 15th, but 90 percent of the tax due for the current year, or 100 percent of the tax due on the prior year must be paid by June 15th in order for the extension to be valid. Non-electronic filers who request the extension and make the payment before June 15th, will have until November 15th to file the report and pay any remaining tax due.

Mandatory electronic funds transfer taxpayers may request an extension of time prior to June 15th, which gives them until August 15th to file the report. Just as the non-electronic taxpayers, 90 percent of the tax due for the current year, or 100 percent of the tax due on the prior year must be paid by June 15th in order for the extension to be valid. Prior to August 15th, electronic taxpayers may request a second extension of time to file their report, but the remaining balance of any tax due must be paid prior to August 15th, as any payments made after August 15th, will be subject to penalties and interest. The second extension allows the electronic taxpayer until November 15th to file their 2021 report.

Texas Workforce Commission

The Texas Workforce Commission has postponed the setting of the 2021 employer unemployment insurance tax rates until July 2021. This was in response to Governor Abbott’s suspension of a section of the Texas Labor Code, Section 204.048, which made this delay possible. This code section sets deadlines for employers who make voluntary contributions to the UI tax system. The TWC decided to follow that decision by delaying the 2021 employer tax rates.

Employers that have a payroll system that requires a rate for 2021 before the actual rate is available, have the option to either use their 2020 actual rate, or use the 2020 minimum tax rate of 0.31%, the 2020 average tax rate of 1.14% or the 2020 maximum tax rate of 6.31%. New employers (operating less than 18 months) may use the 2.7% as their tax rate. Once the 2021 tax rate is announced, employers will want to update their actual in their payroll systems as soon as possible.

In addition, and perhaps more importantly, the 2021 Unemployment Tax Wage Payment Schedule was adjusted as well, but not the Report Schedule, as the reports themselves are still due on the original due date. The quarter one wages, that has an ending date of March 31, therefore, will have a report due date of April 30, 2021, but the payment date has been moved to August 2, 2021. The quarter two wages, that has an ending date of June 30, has the report due on August 2, 2021 (original due date) and a new payment date of September 30, 2021. The remaining two quarters, quarter three and quarter four for 2021 are unchanged. The quarter three wages, whose quarter end is September 30th , will have a due date of November 1, 2021 for both the report and the payment. Likewise, the quarter four wages paid through the end of the quarter at December 31, 2021, will have a due date of January 31, 2022 for both the report and the payment.

For more information, please contact your HM&M advisor.