Does Pennsylvania Accept a Federal Extension?

Taxpayers may need additional time to prepare and submit their income tax returns. This extra time, known as a tax extension, can be helpful for gathering necessary documents, resolving complex tax situations, or ensuring accuracy. While an extension provides relief from an impending deadline, understanding the specific rules for both federal and state tax authorities is important.

Pennsylvania’s Extension Policy

Pennsylvania’s policy regarding tax extensions generally aligns with federal practices but has important distinctions. If a taxpayer has received an approved federal extension to file their federal return (IRS Form 4868) and does not owe Pennsylvania personal income tax, Pennsylvania will automatically grant the same extension for filing the state return. In this scenario, the taxpayer is not required to submit a separate state extension form, such as Pennsylvania Form REV-276, or a copy of federal Form 4868 to the Pennsylvania Department of Revenue.

However, if a federal extension has not been granted, or if a taxpayer anticipates owing Pennsylvania income tax, a separate state extension request is needed. In these cases, individuals should file Pennsylvania Form REV-276, “Application for Extension of Time to File.” This form must be submitted by the original due date of the return, which is typically April 15. The Pennsylvania Department of Revenue grants an extension of up to six months for filing the personal income tax return. Taxpayers can submit Form REV-276 with or without payment, and electronic payment options are available through the myPATH system.

Extension for Filing Versus Extension for Payment

A tax extension typically grants additional time to file a tax return, but it does not extend the deadline for paying any taxes owed. Tax payments are due by the original filing deadline, even if an extension to file has been granted. Failing to pay taxes by the original due date, regardless of an extension to file, can result in penalties and interest.

To avoid potential penalties and interest, taxpayers should estimate their tax liability and pay any amount due by the original deadline, often April 15. This estimated payment can be made with the extension request form or through electronic payment methods. Even if the exact amount is unknown, paying a reasonable estimate can prevent or reduce late payment penalties. While an extension provides a grace period for organizing paperwork, it does not provide extra time to accumulate funds for tax obligations.

Consequences of Non-Compliance

Failing to meet tax obligations, even with an extension, can lead to penalties and accruing interest in Pennsylvania. Penalties can be assessed for both late filing and late payment. For late filing, a penalty of 5% of the unpaid tax is added for each month or fraction of a month the return is late, up to a maximum of 25% of the tax due. The minimum penalty for failure to file is $5.

Beyond late filing penalties, interest also accrues on any unpaid tax balance from the original due date until the payment is made. The interest rate is determined annually by the Department of Revenue and is applied daily. This means that even if a taxpayer files an extension, any tax not paid by the original due date will begin accruing interest. It is advisable to pay as much of the estimated tax liability as possible by the original deadline, even if filing an extension.