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Reporting Adjustments To Taxable Income

Concerning the filing of income tax returns by business entities.
2023 Regular Session
Fiscal Policy & Taxes
Bill Summary

The act changes how pass-through entities may elect to pay taxes, specifies how to report and account for adjustments to federal taxable income, and changes the due date for filing a C-corporation income tax return.

Partnerships and S corporations (pass-through entities) have had 3 options for ensuring that the income taxes owed by nonresident owners will be paid. Pass-through entities have been able to file a composite return on behalf of these owners, withhold an estimated tax payment, or collect and file an agreement that the owner will file a separate return. For income tax years beginning on and after January 1, 2024, section 1 of the act consolidates the composite return and withholding options and clarifies the calculation of the required payment.

Section 2 adopts the multistate tax commission's model statute for reporting adjustments to federal taxable income. When federal taxable income is adjusted by the internal revenue service, or by the taxpayer through an amended federal return, the taxpayer must also report that change to the state. Those changes have had to be reported within 30 days and new federal centralized partnership audit procedures have not been addressed. The act provides additional time for reporting adjustments and allows pass-through entities to handle adjustments at the entity level on behalf of their owners.

Section 3 changes the due date for income tax returns by C corporations. State income tax returns have had to be filed by C corporations by April 15, and prior to 2017, the federal income tax return deadline for C corporations was March 15. This meant that the state's April 15 due date and October 15 extension deadline was one month after the federal due date. In 2017, congress moved the federal due date for C corporations to April 15. Section 3 restores the one-month lag by changing the state due date to May 15, with a November 15 extension deadline.

APPROVED by Governor June 1, 2023



NOTE: This act was passed without a safety clause and portions of it take effect 90 days after sine die.
(Note: This summary applies to this bill as enacted.)


Became Law


Bill Text

  • All Versions (7 )
    Date Bill Type Documents
    06/01/2023 Signed Act PDF
    05/17/2023 Final Act PDF
    05/06/2023 Rerevised PDF
    05/05/2023 Revised PDF
    04/24/2023 Reengrossed PDF
    04/21/2023 Engrossed PDF
    03/30/2023 Introduced PDF

The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details