Short Tax Years and New Businesses on Form 7004
Quick answer
If your tax year is shorter than 12 months, enter its real beginning and ending dates on line 5a and check the reason on line 5b: initial return, final return, change in accounting period, consolidated return to be filed, or other.
Form 7004 is still due by the return's original due date, counted from the day the short year ends.
When you have a short tax year
- A new business whose first tax year starts after the year begins. That's an initial return.
- A business that closes or dissolves during the year. That's a final return.
- A change in accounting period, for example moving from a calendar year to a fiscal year.
- A corporation joining a consolidated group, which can end its own tax year early.
How to fill out lines 5a and 5b
On line 5a, skip the calendar-year box and enter the first and last day of the short year. On line 5b, check the one reason that fits:
| Box | Use it when | Anything to attach? |
|---|---|---|
| Initial return | It's the business's first tax year | No |
| Final return | It's the business's last tax year | No |
| Change in accounting period | You're switching tax years | No, but you generally need IRS approval first (Form 1128; Publication 538) |
| Consolidated return to be filed | The short year comes from joining a consolidated group | No |
| Other | None of the reasons above fit | Yes: a statement clearly explaining why the year is short |
When a short-year Form 7004 is due
By the return's original due date, counted from the end of the short year.
- New corporation (Form 1120): generally the 15th day of the 4th month after the short period ends.
- Dissolved corporation (Form 1120): generally the 15th day of the 4th month after the date it dissolved.
- Dissolved S corporation (Form 1120-S): generally the 15th day of the 3rd month after the date it dissolved.
- Partnership that terminates (Form 1065): the tax year ends on the date the partnership winds up its affairs; count from that date.
- Short year ending in June (corporations): treated as if it ended June 30, which matters for the June 30 C corporation rule.
Use the due date calculator with the short year's last day.
When an S corporation election ends mid-year
If an S election terminates during the year and the corporation becomes a C corporation, it files Form 1120-S for the S short year by the due date, including extensions, of the C corporation's short-year return. Short-period extensions caused by an S election ending can't be e-filed; file that Form 7004 on paper.
Consolidated group members
Members of a consolidated group generally use the parent's tax year. If a member has to file its own short-period return and needs more time, it files its own Form 7004 for that period.
New businesses: get your EIN first
Form 7004 needs the business's name and identifying number as the IRS has them. A new business should use its EIN exactly as assigned. If the name or number doesn't match IRS records, the extension isn't valid.
Common short-year mistakes
- Checking the calendar-year box for a year that started in, say, April.
- Counting from December 31 instead of the day the short year ended.
- Checking "Other" without the statement.
- Changing your tax year without approval when you needed it.
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