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    COVID-19 State and Local Taxpayer Guidance

    Posted by Jonathan Ciccotelli on Mar 17, 2020 4:42:22 PM

    As you are all aware, COVID-19 is drastically impacting how business is being conducted throughout the United States of America and the entire World.  In addition to the guidance issued by the Internal Revenue Service (IRS) regarding penalty and interest waivers, many states have or are in the process of issuing their own guidance.

    covid-19-state-and-local-taxpayer-guidanceFollowing is a summary of the current guidance that has already been issued by the various states.  We will work to continue to keep this as up-to-date as possible as this situation continues to rapidly evolve and states’ issue additional guidance.

    California

    Among other items included in Governor Gavin Newsom’s  Executive Order N-25-20 which is intended to further enhancing California’s ability to respond to the COVID-19 pandemic, it has issued the following with regards to CA state and local taxes.

    Sacramento – The Franchise Tax Board (FTB) today announced special tax relief for California taxpayers affected by the COVID-19 pandemic. Affected taxpayers are granted an extension to file 2019 California tax returns and make certain payments until June 15, 2020, in line with Governor Newsom’s March 12 Executive Order.

    “During this public health emergency, every Californian should be free to focus on their health and wellbeing,” said State Controller Betty T. Yee, who serves as chair of FTB. “Having extra time to file their taxes helps allows people to do this, as the experts work to control the spread of coronavirus.”

    This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through June 15, 2020, to June 15, 2020. This includes:

    • Partnerships and LLCs who are taxed as partnerships whose tax returns are due on March 15 now have a 90-day extension to file and pay by June 15.
    • Individual filers whose tax returns are due on April 15 now have a 60-day extension to file and pay by June 15.
    • Quarterly estimated tax payments due on April 15 now have a 60-day extension to pay by June 15.
    • The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service grants a longer relief period.
    • Taxpayers claiming the special COVID-19 relief should write the name of the state of emergency (for example, COVID-19) in black ink at the top of the tax return to alert FTB of the special extension period.
    • If taxpayers are e-filing, they should follow the software instructions to enter disaster information.
    • The FTB will also waive interest and any late filing or late payment penalties that would otherwise apply.

    Connecticut

    “Effective Immediately: DRS Extends Filing Deadline for Certain Annual State Business Tax Returns (Hartford, CT) – The Connecticut Department of Revenue Services (DRS) is using their statutory authority to grant an automatic extension of Connecticut filing deadlines for certain annual tax returns in order to support businesses during the COVID-19 outbreak effectively immediately. This is consistent with the emergency declarations signed by Governor Lamont.

    • Business returns extended until June 15.
    • Individuals’ returns to follow IRS relief.

    Acting Commissioner of Revenue Services John Biello is exercising this authority under Conn. Gen. Stat. §12-2(a)(5). Effective immediately, the filing deadlines for certain annual tax returns due on or after March 15, 2020, and before June 1, 2020, are extended by at least 30 days. In addition, the payments associated with these returns are also extended to the corresponding due date in June. The impacted returns and the associated filing dates and payment deadlines are set forth below:

    • 2019 Form CT-1065/CT-1120 SI Connecticut PassThough Entity Tax Return: Filing date extended to April 15, 2020; payment deadline extended to June 15, 2020
    • 2019 Form CT-990T Connecticut Unrelated Business Income Tax Return: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020
    • 2019 Form CT-1120 and CT-1120CU Connecticut Corporation Business Return: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020
    • Individuals in the process of preparing their Connecticut income tax (Form CT-1040) returns due April 15, should be advised that DRS will adjust due dates for filing and payment of state income taxes to align with any specific, actionable announcement from the Internal Revenue Service regarding due dates for the filing and payment of federal income taxes.

    Maryland

    To assist businesses affected by the economic impact of COVID-19, Comptroller Peter Franchot today announced he will extend business-related tax filing deadlines. The June 1st extension applies to certain business returns with due dates during the months of March, April and May 2020 for businesses filing sales and use tax, withholding tax, and admissions & amusement tax, as well as alcohol, tobacco and motor fuel excise taxes, tire recycling fee and bay restoration fee returns.

    • Business taxpayers who file and pay by the extended due date will receive a waiver of interest and penalties.
    • If the IRS extends its April 15th filing deadline for corporate and individual income tax returns, Maryland will conform to the decision of the IRS.

    "Our state’s top priority is safeguarding public health for Marylanders, but we must also protect the financial health of our economy," said Comptroller Franchot. "This extension will provide much-needed relief to our business owners as they adjust to changes in consumer behavior, tourism trends and employee workforce output. Maryland will also extend our corporate and individual income tax return filing deadlines if the IRS announces an extension."

    Massachusetts

    • Massachusetts is waiving penalties, automatic 6 months, and will follow federal relief if any.
    • Taxpayers are advised of the following support tools and measures during this public health emergency:
    o In many instances, taxpayers automatically receive at least six extra months to file their tax returns, as long as they satisfy certain tax payment requirements. See AP 604: Extensions of Time to File Tax Returns.
    o DOR may also waive penalties under certain circumstances if a taxpayer is late in paying their tax obligation and will work with impacted taxpayers to waive such penalties. See AP 633:
    o Guidelines for the Waiver and Abatement of Penalties. In the event mail service is delayed, you can ensure that returns, payments and refunds are received if you elect to submit them or receive them by electronic means.
    • In the event the Internal Revenue Service (IRS) issues tax relief to taxpayers with federal filing obligations, DOR is prepared to follow the IRS in offering similar relief for taxpayers with Massachusetts tax filing obligations.

    North Carolina

    Taxpayers who have been affected by novel coronavirus disease (“COVID-19”) will be granted a limited-time waiver of certain penalties imposed upon taxpayers by the North Carolina Department of Revenue (“Department”). The Secretary has elected to waive the following penalties for failing to obtain a license, to file a return, or to pay taxes:

    • The penalty for failure to obtain a license (G.S. 105-236(a)(2);
    • The penalty for failure to file a return (G.S. 105-236(a)(3));
    • The penalty for failure to pay tax when due (G.S. 105-236(a)(4)); and
    • The penalties regarding informational returns (G.S. 105-236(a)(10)) (collectively, “Late Action Penalties”).
    • The waiver applies tax/return/license that is due between March 15, 2020, and March 31, 2020, if the license is obtained, the return or extension application is filed, or the tax is paid by April 15, 2020.
    • To qualify for the waiver, an Affected Taxpayer must file the Tax pay the tax, obtain the license, or receive an extension on or before April 15, 2020.
    • The waiver will be considered a waiver for special circumstances.
    • The waiver will not be considered a waiver for good compliance that can only be granted once every three years per tax type.
    • State law prevents the Department from waiving any interest, including interest assessed for the underpayment of estimated tax, except in the limited case of interest on taxes imposed prior to or during a period for which a taxpayer has declared bankruptcy under Chapter 7 or Chapter 13 of Title 11 of the United State Code.
    • How to Obtain State Penalty Waivers Affected Taxpayers who cannot meet their filing or payment requirement as a result of COVID-19 should complete Form NC-5500, Request to Waive Penalties (“NC-5500”). Affected Taxpayers should write “COVID-19” on the top of the NC-5500.

    Oregon

    The Department of Revenue has several options to grant relief under federal or state declarations of emergency, or when situations arise that impair the ability of taxpayers to meet their obligations. Some options and legal authority are described below.

    Personal Income Tax

    At this time, taxpayers may still file an extension to file with the IRS, and the Oregon Department of Revenue will automatically grant an extension for the Oregon return. Taxpayers may file the federal extension Form 4868 prior to the due date. Both the federal and state extensions grant additional time to file, but are not extensions of payment due dates. The department is tied to the Internal Revenue Service filing and payment due dates for personal income taxes. If the IRS declares the April 15th due date to be extended due to the COVID-19 pandemic, Oregon will automatically connect to those dates for personal income tax filers. The department may also waive penalties under certain circumstances if a taxpayer is late in paying its tax obligation due to a circumstance beyond the taxpayer’s control, such as a declared regional or national state of emergency. Estimated payment due dates for personal income tax are not extended for Oregon, however Oregon law states that interest will not be imposed on an underpayment of estimated tax if the department determines that by reason of casualty, disaster, or other unusual circumstances the imposition of interest would be against equity and good conscience.

    Corporate Activity Tax

    Initial quarterly payments for the new Corporate Activity Tax (CAT) are due April 30, 2020. The department understands that the pandemic may impact commercial activity, up or down, to an extent that makes it difficult for businesses to estimate their first payment. The department will not assess underpayment penalties to taxpayers making a good faith effort to estimate their first quarter payments.

    South Carolina

    The South Carolina Department of Revenue (SCDOR) is offering more time to file returns and pay taxes due April 1, 2020 – June 1, 2020 to assist taxpayers during the COVID-19 outbreak.

    • Tax returns and payments due April 1 – June 1 will now be due June 1, 2020.
    • Penalty and interest will not be charged if payment is made by June 1.
    o This includes:
    • South Carolina Individual Income Taxes
    • Corporate Income Taxes
    • Sales and Use Tax
    • Admissions Tax, and other taxes filed and paid with the SCDOR.
    • The SCDOR is automatically applying this tax relief for all applicable returns and payments; you don't need to take any additional action.
    • The SCDOR encourages taxpayers, some of whom may be working from home, to:
    o Visit the SCDOR's website at dor.sc.gov/emergencies and review SCDOR Information Letter 20-3 for more information.

    Washington State

    “Revenue will work with businesses that cannot file or pay their taxes on time due to the COVID19 outbreak. Governor Inslee declared a state of emergency in response to new cases of COVID-19 in February 29, 2020, which allows the agency more flexibility in working with impacted businesses. Affected businesses that owe Washington taxes may qualify for the following assistance.

    Follow each link to learn more:

    Filing extension for excise tax returns
    Late payment penalty waiver request

    Businesses can request an extension or penalty waiver by sending a secure email in their My DOR account or by calling Revenue’s customer service staff at 360-705-6705, Monday through Friday 8 a.m. to 5 p.m.

    Businesses can also request:

    • Rescheduling of a planned audit (contact the auditor).
    • More time to file a business license or registration renewal (Call Business Licensing Service at 360-705-6741 or by email at BLS@dor.wa.gov).
    • An extension of its expiring resellers permit (Call 360-705-6705 or by email at Reseller@dor.wa.gov).”

    In addition, click here for additional updates from the AICPA. Please contact us with any questions.

     

    Topics: Tax Planning & Strategies, COVID-19

    Jonathan Ciccotelli

    Written by Jonathan Ciccotelli

    Jonathan Ciccotelli is the Partner-In-Charge of Meaden & Moore’s Tax Services Group. For over 29 years, Jonathan has worked closely with private and public companies in manufacturing, transportation, distribution, construction, and retail under a variety of business structures, including S-corporations, C-corporations, consolidated groups, and limited liability companies. He enjoys running, cycling, and cheering on his kids at sporting events.

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