Proposed legislation to set estimated tax due dates to even, quarterly intervals has resurfaced in the House and enjoys support from tax and accounting professional organizations.
The Tax Deadline Simplification Act was introduced May 25 in the House by representatives Debbie Lesko, Republican of Arizona, and Brad Schneider, Democrat of Illinois. It would establish that estimated tax installments for individuals, businesses, estates, and trusts are due 15 days after the end of each quarter, meaning the deadlines would be the 15th day of the months of January, April, July, and October.
Currently, under Code Sec. 6654(c), estimated tax deadlines fall in June and September, so the payment schedule is set at uneven intervals not aligned with calendar-year quarters, “which can cause confusion for our nation’s hardworking taxpayers,” said Lesko in a press release. “I am pleased to introduce this common-sense legislation to change these deadlines to a uniform schedule and make it easier for taxpayers to save appropriately and comply with due dates.”
“Unnecessary complexity causes confusion and adds costs, so I am proud to introduce this bipartisan legislation with Rep. Lesko to simplify tax deadlines to help working families and business owners better plan and pay their taxes in a timely manner,” added Schneider.
The two lawmakers previously brought forth the same proposal (HR 4214) in June 2021 during the 117th Congress. Democrats Ed Case of Hawaii and Josh Gottheimer of New Jersey, as well as Republicans David Schweikert of Arizona and Maria Elvira Salazar of Florida, cosponsored the bill. At that time, the American Institute of Certified Professional Accountants endorsed the proposal.
“Changing the June 15 date to July 15 and the September date to October 15 would consistently schedule the dates to three months apart and tie to the normal quarter date (15 days after the quarter end) making it easier for taxpayers to meet their tax obligations in a timely matter,” wrote AICPA Tax Executive Committee Chair Jan Lewis in a letter to Lesko and Scheider June 30, 2021.
After the bill was reintroduced last month, the National Association of Tax Professionals (NATP) also expressed its support. “Our organization supports the country’s federal tax preparers, and we see first-hand how the current payment schedule can be confusing to their clients because it’s not based on true quarters,” NATP Executive Director Scott Artman and Board President Jaimee Hammer wrote to the bill’s sponsors June 6. “This proposed legislation would match other tax collection systems, for example, payroll. The annualization of income would truly be representative of a 4-quarter basis. For these reasons, we support this bill as it would ease tax planning, improve taxpayer compliance, and decrease taxpayer burden.”
Artman told Checkpoint that the current schedule often leads to “late payments and penalties” and said the bill is a “practical solution” for preventing unnecessary confusion.
For more information about quarterly estimated tax deadlines, see Checkpoint’s Federal Tax Coordinator ¶S-5241.
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