Federal and state tax authorities have responded to the Coronavirus by announcing extensions of some tax filing deadlines for most taxpayers. At BPM, we are monitoring these announcements and will provide updates as information becomes available and formal guidance is issued.
What do we know, as of March 16, 2020?
Federal Coronavirus Update
On March 11, Treasury Secretary Steven Mnuchin said the IRS plans to delay the April 15 tax deadline for most individual taxpayers. As of March 16, the IRS and Treasury Department have not issued any formal guidance regarding the details of the delayed filing deadlines. In addition, March 16th marks the filing deadline for many 2019 business returns, including those for calendar year-end S corporations, partnership, and limited liability companies (LLCs) taxed as partnerships or S corporations.
The AICPA has been talking to the IRS and Treasury regarding filing deadline relief, and on March 15 the AICPA emailed CPAs to update the community on its communications with the federal tax authorities. It’s expected the Treasury and the IRS will make an announcement this week to extend the April 15 filing deadline by as much as 90 days. It’s also expected to waive penalties and interest for “most taxpayers.” Regarding the March 15 filing deadline for many businesses, the Treasury and IRS have indicated to the AICPA they would “be generous in determining reasonable cause abatement of any penalties for taxpayers and tax preparers unable to file in a timely manner.”
The IRS has set up a “Coronavirus Tax Relief” page on their website. We expect, as additional information becomes available and formal guidance is issued, it will be accessible on that webpage.
California Coronavirus Update
On March 12, Governor Gavin Newsom issued an Executive Order announcing special tax relief for filers of 2019 California tax returns. The Executive Order states tax return filings and tax payments with deadlines from March 15 through June 15, 2020 are extended to June 15, 2020.
The Franchise Tax Board (FTB) announced the extensions of the filing and payment deadlines to June 15 includes:
Partnerships and LLCs taxed as partnerships whose returns are due March 15
Individual filers whose returns are due on April 15
Quarterly estimated tax payments that are due on April 15
The FTB filing and payment extensions listed above apply to individual taxpayers and the business tax returns or payments filed with or payable to the FTB. In the FTB’s announcement of the Governor’s Executive Order, although corporate tax filings and payments were not listed, it appears the Executive Order would also apply to corporate tax filings and payments.
We expect the FTB tax filing and tax payment updates will be displayed prominently on the main page of the FTB’s website. Taxpayers can also find the FTB’s March 13 announcement of the Executive Order is also on their website.
In addition to the FTB filings and tax payment extensions, the California Department of Tax and Fee Administration (CDTFA) may be assisting many businesses and some individuals who file returns and reports and remit tax payments to the CDTFA. Sales and use taxes are among the various filings and payments made with the CDTFA. The CDTFA’s website indicates the Governor’s Executive Order authorizes it to assist individuals and businesses impacted by the Coronavirus. Such assistance “includes granting extensions for filing returns and making payments, relief from interest and penalties, and filing a claim for refund.” Taxpayers may request assistance by contacting the CDTFA by phone, email or through the online services on their website.
BPM is monitoring the tax deadline extension possibilities in other states outside of California. For additional information, contact your local BPM office.
BPM will update this communication when tax authorities provide additional information and when formal guidance is issued. Please contact your BPM tax advisor with any questions.