Federal extension status NOT automatically flowing to state return

[dkh]

Discovered on the Indiana Information Worksheet - Extension status - Yes box is not populating automatically that a federal extension has been filed.      Any other states having the same issue ? 

Now I wonder for how long ???   If the client is receiving a refund it will generally will not matter.  However it does matter when claiming the Unified Credit for the Elderly after the due date - no extension you lose the credit.   

[PATAX]

Thanks for the heads up... I'll have to check that more diligently now for individual and business returns... That is something that ProSeries should do automatically for all state returns, no excuse... 

[BobKamman]

Same situation with Arizona.  The box on the information worksheet has to be checked  I'm not sure we should expect the software to do that automatically.  If there is a balance due on the state return, a separate extension form should be filed with payment.  Should the program always assume that was done?  Should it assume that no state extension was requested if none was filed for federal?  

[PATAX]

If the state automatically accepts a federal extension that was filed then that box should be automatically checked yes... I believe that is the case in Indiana...

[BobKamman]

The Form 4868 can be denied if not filed timely.  Out of luck with IRS,  out of luck with the state also, right?  How does the software know that an extension request was timely filed?  Even if e-filed it could be missing a name or SSN that was corrected later.  

There are a lot of "automatics" that IRS prohibits software vendors from using.  This could be one that states won't approve, even if it's not obvioius why they don't like it.  

[PATAX]

You are right about that and that is why I also always file state extensions for individuals and businesses... But many tax preparers do not and they just file the federal extension since the state will accept it...

[poolcleaner]

The program will tell you very quickly if the federal extension is being filed late.  This has happened to those of us in Texas, Oklahoma, Louisiana, Tennessee, and Alabama this year with the automatic extension until June 15 of 2021.  If you tried to file an extension in June up until the 15th, it was rejected immediately and you had to file that legitimate extension on paper.

[Skylane]

NJ started requiring proof of the federal extension when filing a late return a couple of years ago… if you’ve filed a federal extension, you can it file the NJ return until you attach a pdf of the federal 4868 to the NJ1040…. 

it’s a pita but works pretty well 

[dkh]

Indiana gives an automatic extension if the Federal 4868 is filed - no need to file a separate state extension.   I've done it this way for 30+ years.   My issue is ProSeries not properly marking the Indiana return to that there was a federal extension.   I can manually mark the worksheet.

[dkh]

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@BobKamman wrote:

  I'm not sure we should expect the software to do that automatically.  If there is a balance due on the state return, a separate extension form should be filed with payment.  Should the program always assume that was done?  Should it assume that no state extension was requested if none was filed for federal?  

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The software has done this automatically in past years why not now.  My guess would be a programming glitch since the extension deadline was moved to May 17.   I don't expect the software to make assumptions to what extension was or was not filed.  However, if I have efiled a federal extension and received acknowledgment of it's acceptance and my state allows that for the state extension I DO want the program to automatically mark my state return. 

That's not asking for too much.  It's no different than expecting the program to automatically carry state tax withholding entered for the W2 on the federal return to flow to the state return.