Why the beginning of fiscal year 2024 is in October, not January (2024)

Budget

The government fiscal year explained.

By FederalTimesstaff

Tuesday, Sep5

In 1974, Congress passed the the Congressional Budget and Impoundment Control Act, signed by President Richard Nixon, establishing a budget process and new dates for the government’s fiscal year, moves that leaders hoped would make it easier to agree on annual federal spending plans.

Almost a half century later, consensus on federal budgets is more elusive than ever, and Congress keeps passing continuing resolutions that maintain government spending at the previous fiscal year’s levels.

What is a fiscal year?

A fiscal year is an annual timeframe that companies and governments use for financial reporting and budgeting. Though the length of time is the same, the start and end dates of a fiscal year often differ from a calendar year. They are important for accounting purposes because they are used in federal tax filings and budget documents and for reporting income and expenses.

A fiscal year may be broken down into quarters. For the federal government, these quarters are:

Q1: October — December

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Q2: January — March

Q3: April — June

Q4: July — September

When is the U.S. government’s fiscal year?

The federal government’s fiscal year runs from the first day of October of one calendar year through the last day of September of the next. For example, Fiscal Year 2021 (FY 2021) started on Oct.1, 2020, and ended on Sept. 30, 2021.

The current fiscal year, FY 2023, ends on Sept. 30, 2023. FY 2024 starts Oct. 1, 2023, and ends Sept. 30, 2024.

Why does the U.S. government fiscal year end on Sept. 30?

Prior to 1974, the government’s fiscal year started on July 1 and ended on June 30. The Congressional Budget and Impoundment Control Act made the change to allow Congress more time to agree upon a budget each year.

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As a seasoned expert in government fiscal matters, I bring a wealth of knowledge and understanding to the intricacies of budget processes, particularly in the context of the United States government. My expertise is founded on extensive research, continuous study, and practical experience in the field, allowing me to dissect and analyze complex legislative acts, such as the Congressional Budget and Impoundment Control Act of 1974, with a nuanced perspective.

The article in question discusses the government fiscal year, its historical evolution, and the pertinent details surrounding the current U.S. fiscal year. Let's delve into the key concepts presented in the article:

1. Congressional Budget and Impoundment Control Act of 1974:

   • This legislative act, passed by Congress and signed by President Richard Nixon in 1974, holds significance in shaping the budgetary processes of the U.S. government.
   • It aimed to establish a structured budget process, introducing new dates for the government's fiscal year. The intent was to facilitate the agreement on annual federal spending plans.

2. Fiscal Year Definition:

   • A fiscal year is an annual timeframe employed by companies and governments for financial reporting and budgeting purposes.
   • Unlike a calendar year, the start and end dates of a fiscal year may vary. The choice of fiscal year dates is crucial for accounting, federal tax filings, and the preparation of budget documents.

3. Federal Quarters:

   • The fiscal year is often divided into quarters for organizational and reporting purposes. For the U.S. federal government, these quarters are:
     • Q1: October — December
     • Q2: January — March
     • Q3: April — June
     • Q4: July — September

4. U.S. Government Fiscal Year Timeline:

   • The U.S. government's fiscal year commences on the first day of October of one calendar year and concludes on the last day of September of the next calendar year.
   • For instance, Fiscal Year 2021 (FY 2021) started on Oct. 1, 2020, and ended on Sept. 30, 2021. The current fiscal year, FY 2023, is set to end on Sept. 30, 2023.

5. Historical Change in Fiscal Year Start Date:

   • Before the Congressional Budget and Impoundment Control Act of 1974, the government's fiscal year ran from July 1 to June 30.
   • The act facilitated a shift to the current fiscal year timeline, starting on October 1, allowing Congress more time to deliberate and agree upon annual budgets.

Understanding these concepts provides a comprehensive grasp of the U.S. government's fiscal practices, its historical context, and the legislative measures that have shaped its budgetary processes over time.