It’s that time of year again for your annual Washington tax reminder: if you report under the Service and Other Activities classification or have apportionable income or royalty income in Washington state, the scary 13th return — the Annual Reconciliation of Apportionable Income — is due by Thursday, October 31. Missing this deadline could result in a 29-percent penalty.
What does this return do? It allows you to adjust your Washington apportionment calculation for the preceding calendar year. If there is a discrepancy, you may either receive a refund or owe additional tax, penalties, and interest.
The Washington Department of Revenue’s position is that the 29-percent late payment penalty applies if you fail to file the reconciliation form. This means even if you do not need to reconcile, you still need to file. As a result, to avoid this penalty, ensure the return is filed and any tax due is paid by the Halloween deadline. Again, to be clear, even if no tax is due, the best practice is to file the form to avoid potential penalties on future assessments.
For more information, visit the Department’s website and then go to “My DOR Help” > “Special Credits: Apply and reconcile: File Annual Apportionment Reconciliation.”
If you have questions about whether your activities are apportionable, how to apportion (including the apportionment formula or throw-out income), how your revenue or income should be attributed, or whether you are eligible for any deductions, please reach out.
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