The North Carolina Department of Revenue has approved a new rule extending the filing deadline for corporations to submit their income tax and franchise tax returns by one month. Effective for tax years beginning on or after January 1, 2025, the change increases the extension period from six months to seven, aligning state deadlines more closely with federal filing schedules and easing compliance for businesses statewide.
The amendment to North Carolina Administrative Code section 05C.2004 lengthens the filing window for both corporate income tax and franchise tax returns. For calendar-year corporations, the filing due date for the 2025 tax year has been moved from October 15 to November 15. The adjustment affects domestic corporations and C corporations operating in the state.
Corporations that obtain an automatic six-month extension from the IRS will automatically receive the North Carolina extension. Those without a federal extension must submit Form CD-419, the application for extension of time to file a franchise and corporate income tax return, on or before the 15th day of the fourth month following the end of the income year.
“Corporate taxpayers now have seven months from the original due date to file,” the North Carolina Department of Revenue stated in its official notice issued January 29, 2025. The agency clarified that the rule only extends the time to file—the deadline to pay remains the same. Taxes owed must still be paid by the original due date to prevent interest and penalties.
Corporations must ensure tax payments accompany any extension request. The department noted that final payment of any remaining balance is due on the original due date, typically the 15th day of the fourth month after the close of the fiscal year. Late payments will accrue interest daily until the amount is fully paid.
Estimated tax payments continue to be required on a quarterly or monthly basis, depending on a company’s income level. Businesses must calculate and remit these payments to offset their total tax liability for the year.
North Carolina’s franchise tax is levied annually on a corporation’s tax base, which generally reflects its net worth. While the franchise tax rate remains unchanged, every corporation is required to pay a minimum franchise tax each year.
Corporations calculate this liability using Schedule O, filed with the corporate income tax return. The form details capital stock, surplus, and other factors that determine the amount of tax a business is required to pay. The seven-month extension provides additional time to reconcile deductions, credits, and other returns before submitting the final report.
“The extension gives businesses flexibility to complete complex filings without sacrificing accuracy,” said Melissa Hughes, a Charlotte-based tax consultant. “It’s particularly beneficial for companies coordinating between state and federal returns.”
The extension applies to C corporations, domestic corporations, and companies taxed on corporate income under state law. These entities typically prepare extensive information returns and supporting schedules detailing dividends, partners’ share allocations, and transactions with affiliates.
For corporations operating across multiple states, aligning filing due dates simplifies the process of determining taxable income and deductions. The additional month helps firms calculate their tax base, verify credits, and ensure that tax forms match federal data before submission.
Businesses must continue to file and pay other taxes—including withholding, sales, and employment taxes—on their regular schedules. The new rule applies only to the corporate income tax and franchise tax return filing period.
Until this update, North Carolina allowed only a six-month extension for corporate income and franchise tax returns. The rule had not changed in over a decade, despite corporate reporting becoming more complex and federal deadlines evolving.
By expanding the period to seven months, the state now aligns with federal filing standards. It reduces the administrative burden on businesses that must coordinate across multiple tax years and fiscal periods.
North Carolina’s corporate income tax applies to all corporations doing business in the state. The tax is levied on taxable income, which includes income from North Carolina sources after adjustments and deductions allowed by law. Franchise tax, by contrast, is based on net worth or capital stock, ensuring that all corporations contribute to the state’s revenue system even if they report low income.
Tax professionals and state officials say the change is both overdue and practical.
“This additional month will improve filing accuracy for companies managing complex books or consolidated returns,” said Michael Torres, CPA, of Raleigh. “Many corporations struggled to reconcile federal and state data under the old timeline.”
An NCDOR spokesperson reiterated the agency’s commitment to efficient processing. “Taxpayers are encouraged to file their taxes electronically; it is safer, more convenient, and will be processed faster than traditional paper filing,” the department said in its January 15, 2025, announcement launching the 2025 business tax season.
The department also urged taxpayers to use electronic payment methods to avoid delays and ensure that payments are filed and credited accurately.
Corporations should review their internal calendars to reflect the new seven-month filing deadline. For example, a company whose fiscal year ends December 31 must file by November 15, while one ending March 31 will file by October 15 of the following year.
The department reminds taxpayers that the extension does not affect the due date for payments—only the time allowed to file. Businesses should continue making estimated tax payments throughout the income year and ensure that any final payment is made on time to avoid penalties.
Corporations can access all current tax forms, instructions, and information returns at ncdor.gov. The official notice, “Extension of Time to File Franchise and Corporate Income Tax Return,” is available as a PDF and outlines every applicable change for the 2025 tax year and beyond.
By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now
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