A Tennessee state tax extension is used to extend the tax deadline by six months. While these are relatively easy to apply for, you should really only take advantage of one when you have a valid reason for doing so. An example would be if you are having difficulty obtaining your essential tax documents, such as your interest income statements. In this case, an extension will give you enough time to procure your paperwork.http://www.tn.gov/revenue/forms/indinc/inc25101.pdf 

If you owe a balance due, you will not have additional time to remit your payment. Any taxes owed are still due by April 18, 2011, even if your extension request is granted. But filing the extension serves to let the Department of Revenue know that you will be filing your return that year. This will keep you from being charged a late filing penalty.http://www.clarksvilleonline.com/2011/01/05/irs-kicks-off-2011-tax-season-with-deadline-extended-to-april-18th/ 

To get a Tennessee state tax extension, the first thing you'll need to do is to compile all of your important tax information and forms. This will include your personal identification information, as well as the amount of taxable income you received during the tax year. You will need the following:

1. Your full name and current mailing address
2. Your Social Security number
3. Your spouse's name and Social Security number, if you are filing a joint tax return
4. The total of your taxable income - Tennessee only taxes income from interest and dividends. These amounts should be reported to you by your financial institutions. For a complete list of taxable income sources, visit the Tennessee Department of Revenue website.http://www.tn.gov/revenue/forms/indinc/inc250.pdf 
   

In order to complete your extension, you will need a copy of the Tennessee Form INC-251 "Tennessee Department of Revenue Application for Extension of Time to File Individual Income Tax Return". If you are also filing a federal income tax extension, you will only need to attach a copy of your IRS Form 4868 to your Tennessee state return.http://www.irs.gov/pub/irs-pdf/f4868.pdf 

Since you will need to calculate your state tax liability, you will also need a paper copy of Form INC-250 "Tennessee Department of Revenue Individual Income Tax Return". You can use this form to figure your tax owed. If you have Internet access, you can download these forms from the Tennessee Department of Revenue website. If you don't have access to the Internet, you can usually pick up a copy at your local library.http://www.tn.gov/revenue/forms/indinc/inc250.pdf

Your next step is to calculate the amount of your state tax liability. In Tennessee, tax liability refers to the amount of tax owed on your taxable income minus your exemption amount. You need to figure this to file your extension, because if you owe a balance due on your return, you will need to pay your balance with your extension form to avoid a late payment penalty.http://www.tn.gov/revenue/forms/indinc/inc250.pdf 

Get your Form INC-250 and the accompanying instructions. Read the form instructions carefully to see what kinds of interest income that you received will be taxable. Turn to Schedule A and Schedule B in your Form INC-250. You will want to list the amount of your taxable income from each source on its own line. Add the total and enter that amount at the bottom.http://www.tn.gov/revenue/forms/indinc/inc250.pdf 

Carry the total over to page one of the state return. Then you will subtract the exemption amount that is appropriate for the filing status you will be using on your return. This will leave you with the total amount of income that is subject to taxation for this year.http://www.tn.gov/revenue/forms/indinc/inc250.pdf 

Tennessee has a flat tax rate for income - 6%. To figure your tax liability, simply multiply the amount on line 3 by 6 percent. Then you will subtract any prepayments you made during the year. (These will usually be estimated tax payments.) What is left will be either the amount you overpaid (refund) or the amount you underpaid (balance due).http://www.tn.gov/revenue/forms/indinc/inc250.pdf

Now that you have figured the amount of your balance due or refund, you can complete your state extension form. Begin by entering your Social Security number and your spouse's Social Security number (if applicable). If you are an employer, you will also need to enter your Federal Employer Identification Number (FEIN).http://www.tn.gov/revenue/forms/indinc/inc25101.pdf 

At the bottom of the first section on the form, you will also need to enter the city and county in which you live. On the line following the extension terms, you will need to state the exact reason you are requesting an extension. Be sure that it is a valid reason, because the state has the authority to deny invalid requests.http://www.tn.gov/revenue/forms/indinc/inc25101.pdf 

Select your appropriate filing status and any special exemption circumstances you have. Then, go on to enter your total taxable income (from line 1 of Form INC-250). Subtract your exemption amount to find the amount subject to tax. Then enter the amount of your state tax.http://www.tn.gov/revenue/forms/indinc/inc25101.pdf  

Sign and date the return. If you are filing a joint extension with your spouse, he or she needs to sign and date it, too. Make a copy of the completed form for your records. Then send the extension request, along with any payment due, to the address stated on the form.http://www.tn.gov/revenue/forms/indinc/inc25101.pdf 

You will need to enclose a payment for your balance due with the form in order to remain in compliance with the tax law. You can pay using a check or money order along with your form. If you prefer to make a payment in person, you can visit a regional office of the Department of Revenue to pay in cash.http://www.tn.gov/revenue/forms/indinc/inc25101.pdf

If your extension request is approved, it will be valid for six months, or until October 17.http://www.tn.gov/revenue/forms/indinc/inc25101.pdf To avoid last minute filing, you will want to begin working on your state tax return immediately after your extension is granted. Consult a tax preparer if you need assistance with your return.