State Tax Coronavirus Update #2 – Conformity to July 15th Federal Extension

With the official extension of the federal income tax return due date to July 15^th  the spotlight now turns to the states to see how they will react, as several initially indicated they would follow the federal government’s lead. 

Before we get into the update on states that have extended their tax return filing deadlines, we just want to also point out that there are other matters to pay attention to including the impact on existing health care plans and treatment of unemployment compensation benefits and claims.  For example, Georgia is requiring employers to file unemployment claims on behalf of their employees that they have laid off or reduced hours due to the Coronavirus. Also, Michigan and North Carolina have confirmed that employees affected by Coronavirus may collect unemployment insurance benefits and the employers will not be charged for those benefits. 

Sales and Use Tax Relief at the State Level

States are also providing sales and use tax relief.  For example, Alabama, Illinois and Massachusetts have provided extension of time to pay and possibly file sales tax returns for certain small businesses, often based on how much sales taxes were remitted in past year.  Other states including California, District of Columbia, New York, and Vermont, have simplified their process to request relief but states vary regarding whether protection applies to just the payment of tax or also the filing of the returns. 

Maryland has extended their sales tax return filing and payments due in March, April and May to June 1^st while Minnesota extended their sales tax return just due on March 20^th to April 20^th.

State Extensions

Now, back to the state income tax extensions. Some states have extended certain returns prior to the federal extension to July 15^th. Following is a list of states that have taken action since then providing official guidance that they will follow the federal treatment and extended the due date of their returns and taxes (including 1^st quarter estimated tax payments) due on April 15^th to July 15^th for all taxpayer types (individuals, corporations, partnerships, etc.) unless noted otherwise:

• Colorado, Delaware, Missouri (including St. Louis), Nebraska, New Mexico, Oklahoma, Pennsylvania, Tennessee and Wisconsin.
  • Arizona, Louisiana and North Carolina did not extend the due date for 1^st quarter estimated tax payments.
  • California extensions apply to returns and payments including estimated tax payments due between March 15^th and July 15^th.
  • Connecticut had previously extended business tax returns (link to first state update) and now have provided an extension for individuals that also includes the 2^nd quarter estimated tax payment.
  • Alabama, District of Columbia, Kansas, Maryland, North Dakota and Vermont extension guidance did not address 1^st quarter estimated tax payments that are due in April.
  • Hawaii extended their April 20^th due date to July 15^th but estimated tax payment due dates have not been extended,
  • Illinois did not extend the estimated tax payment due dates and it is currently unclear if the extension to July 15^th includes the personal property replacement tax return for partnerships.
  • Indiana also extended returns and payments due May 15^th to August 15^th.
  • Iowa extended their April 15^th due date to July 31^st but 1^st quarter estimated tax payments were not extended.
  • Kentucky extended return and payment due date for individuals but did not address 1^st quarter estimated tax payments in its guidance.
  • Minnesota extended their April 15^th due date for individuals only and did not extend the due date for estimated tax payments.
  • Montana extended time to file and pay individuals tax returns including 1^st quarter estimated tax payments.
• Georgia, Massachusetts, Rhode Island, South Carolina and Utah: indicated that they will follow federal extensions but still awaiting official guidance.
• Michigan, Texas and West Virginia: have not indicated that they will be extending their tax return deadlines.
• Mississippi extended their due date to May 15^th.
• New Jersey: passed legislation (waiting on Governor’s signature) to extend the filing and payment deadlines to June 30^th.
• New York: indicated they will follow federal extensions and new release will be issued by Department of Taxation within next few days.
• New York City: allowing for request of penalty waivers (not interest) for business tax returns due between March 16^th and April 25^th that are filed and paid late.
• Ohio: expected to announce that state and city income tax returns, but not estimates, will be extended to July 15th.
• Virginia Department of Taxation: extended the payment, but not filing, of taxes due between April 1^st through June 1^st to June 1^st. Though filing due dates are not officially extended, Virginia provides for an automatic six-month filing extension.

Other State Tax Extensions

• California Employment Development Department (EDD) is granting a 60-day extension of time to file and/or deposit state payroll taxes (note – EDD must receive written extension request within 60 days of original due date).
  • San Francisco: allowing quarterly business taxes due April 30^th to February 2021.
• Chicago: extended the tax payment due date to April 30^th for several of its taxes related to food and entertainment industry including the Restaurant Tax, Bag Tax, Bottled Water Tax, Amusement Tax and the Parking Tax.
• District of Columbia: Biennial Report due April 1^st is extended to June 1^st.
• Iowa: extended the semi-monthly income tax wage withholding deposit for the period ending March 15^th to April 10^th.
• Louisiana: allowing extension to file and pay February sales tax returns due on March 20^th to May 20^th and first quarter state unemployment insurance payments to June 2020.
• Michigan: waiving penalty and interest for sales, use and withholding tax payments due March 20^th if paid by April 20^th.
• Minnesota: granting a 60-day extension to May 15^th for MinnesotaCare returns that were due on March 15^th if extension request is received by April 15^th.
• New York City: allowing a request of penalty waivers (not interest) for excise tax returns due between March 16^th and April 25^th that are filed and paid late.
• North Carolina: extends their withholding tax payment deadlines from March 15^th and March 31^st to April 15^th.
• Oregon: will not impose underpayment penalties if taxpayers make a good faith effort to estimate their first quarter CAT payment which is due on April 30^th.
• Pennsylvania: waiving penalties on accelerated sales tax prepayments for March and April.
• Washington: will provide extensions of 60 days for combined B&O and sales tax monthly filers and 30 days for quarterly filers.

We continue to advise to check in on the “AICPA State Tax Filing Relief Chart” and/or specific state department of revenue or other applicable government web sites for the most up-to-date information: https://www.aicpa.org/content/aicpa/news/aicpa-coronavirus-resource-center.html .

Certainly, more state tax updates are forthcoming, not to mention how the states will conform to and/or respond to the third federal coronavirus bill that is expected to get passed soon – so stay tuned!