COLUMBIA — Taxpayers will have until October to complete their state income taxes amid continued uncertainty over whether legislators will adopt changes in the federal tax code for the year.
A bill that the House passed earlier this month would allow taxpayers to take advantage of breaks included in the federal One Big Beautiful Bill Act, including exemptions for taxes on tips and overtime, as well as increased breaks for seniors. But the full Senate has yet to take up the proposal.
Considering the uncertainty over how much people might owe, the Department of Revenue granted an automatic, six-month extension for all filers, from April 15 to Oct. 15. The new deadline applies only to the date to file taxes for refunds, not the date to pay taxes owed.
Despite the recognized confusion, however, taxpayers will need to figure out a good estimate of any state income taxes owed ahead of Tax Day.
Anyone who owes money must still pay at least 90% of that by April 15 or face fines, the agency said in a Thursday news release.
More than 1.3 million people had filed their taxes as of last Friday, according to the agency. The department will give more information about whether they need to refile if and when the bill passes, according to the news release.
The impact of last-minute changes to the tax code on taxpayers was one concern among senators. Because of the uncertainty, accountants are unsure of how to proceed, and people may have to pay their tax preparers twice, senators said.
The Senate Finance Committee advanced the bill last week, but when the full Senate might debate it on the floor is unclear.
The bill would apply only for taxes due this year. Starting with tax filings due in 2027, the state will decouple from the federal government to create its own tax code as part of a bill awaiting the governor’s signature that reduces income tax rates.
The tax conformity bill is expected to reduce state revenue by $288.5 million this year. That would come on top of a $309 million reduction in revenue during 2026-2027 from the bill reducing income tax rates, plus the potential for another $259 million cut in revenues to cover expanded property tax breaks for older homeowners, as per a bill passed by the Senate.
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