Pressing pause: A guide to federal and state tax extensions

I’ve never met a person that was excited about tax time. It comes quickly at the top of the year, and you’re scrambling to get all your documents and financials in order. If you are like many of us who get overwhelmed by the thought of tax time, take a deep breath and file a tax extension. This article will assist you in filing tax extensions for gig workers, content creators, freelancers, and small business owners who own sole proprietor and single-member LLCs. While this article does identify federal tax extensions for multi-member LLCs, partnerships, corporations, and S corporations, you will need to file separate state tax extensions in some cases. 

What is a tax extension?

A tax extension is the ability to delay the timing on filing your tax returns. Filing tax returns late can cost you money. In order to avoid this, you should file a tax extension. 

Federal tax extensions can differ from state tax extensions. Most often, if you file a federal tax extension, then you do not need to file a state tax extension; however, there are exceptions. The following states require you to file a tax extension separate from a federal one:

Connecticut, Delaware, Missouri, New Hampshire, New York, Nebraska, Oklahoma, Pennsylvania, Rhode Island, South Carolina, and Vermont

Does your state require you to file a tax extension separate from federal? If so, here's why. 

Connecticut requires you to file a tax extension, Form CT-1040 EXT, separate from a federal extension if you expect to owe.

Delaware requires a separate filing, Form PIT-EXT, by May 1st, unlike many other states, which require a filing or payment by April 18th.

Missouri requires you to file a tax extension, Form MO-60, separate from a federal extension if you expect to owe a tax balance.

New Hampshire requires you to file a tax extension, Form DP-59-A, separate from a federal extension if you expect to owe.

New York requires all who need a tax extension to file Form IT-370.

Nebraska requires you to file a tax extension, Form 4868N, if you expect to owe a tax balance. 

Oklahoma requires a separate tax extension filing, Form 504-I, if you expect to owe a balance. Unlike many states, Oklahoma requires you to pay 90% of your tax liability by the original date of the return in order for your extension to be valid. 

Pennsylvania requires a separate tax extension filing, PA Form Rev-276, if you expect to owe a tax balance. 

Rhode Island requires you to file a tax extension, Form RI-4868, separate from a federal extension if you expect to owe.

South Carolina requires a separate tax extension filing, Form SC4868, if you expect to owe a tax balance. 

Vermont requires a separate tax extension filing, Form IN-151, if you expect to owe a tax balance. 

I’m self-employed and have a W-2. Do I need to file 2 tax extensions?

It depends on what type of business you have. If you have not incorporated your business (are a sole proprietor) or have an LLC, you will only need to file a 4868. For more information, see the chart below that details tax extensions for multi-member LLCs, partnerships, S corporations, corporations, and nonprofits. 

If my state does not have income tax, do I still need to file a federal tax extension?

If you cannot file your federal tax return by the due date, you will still need to file a federal tax extension even if your state does not have income tax. 

All I need to do is file the form?

Depending on if you have a balance due or are expecting a refund at the federal or state level. If you have a balance due for your federal taxes, you will still need to make a payment in some form. The payment can either be the full amount of tax owed, or you can sign up for a payment plan. You can make a payment or sign up for a payment plan at eftps.gov. If you have a balance due for your state taxes, you will need to make a payment or set up a payment plan directly with that state. 

If I just pay my federal taxes, is that good enough?

No. If you have a balance due for your state taxes, you will need to make a payment or set up a payment plan with that state’s revenue or treasury department. 

Which Federal Tax extension do I need to file?

The type of tax extension you should file depends on what type of tax returns you file. A small business owner will typically always file a 4868 because this is for yourself; alongside a 4868, a small business owner will also file the necessary tax extension form required for their business. If you own or are a partner or shareholder in corporations, partnerships, S corporations, and nonprofits, you only need to file a 4868 if you can not file your individual taxes, Form 1040, by the deadline.