Americans coping with the impact of the coronavirus (COVID-19) outbreak received some relief as both the Internal Revenue Service (IRS) and the California Franchise Tax Board (FTB) recently took unprecedented steps to delay tax filing and payment deadlines. However, conflicting deadlines make this year’s tax filing even more confusing for most taxpayers.
To help mitigate the confusion, our CGS3 COVID-19 Legal Task Force is providing the following summary for your use in planning this year’s filings:
What are the new federal deadlines?
- On March 13th, President Trump issued an emergency declaration instructing Treasury Secretary Mnuchin to provide relief from tax deadlines for Americans adversely affected by the COVID-19 emergency.
- In response, the IRS postponed the due date for any person filing a return or making a federal tax payment from April 15,2020 to July 15, 2020.
- Quarterly estimated tax payments due on April 15, 2020 are now due July 15, 2020.
- The IRS also extended the due date for contributions to Individual Retirement Accounts, Health Savings Accounts and Archer Medical Savings Accounts from April 15, 2020 to July 15, 2020.
Are the California deadlines different?
- California is taking similar measures for state taxpayers.
- All 2019 California individual and business returns and payments that would have been due on April 15, 2020 are now due July 15, 2020.
- The 90-day extension includes: (1) California estimated tax payments due on April 15, 2020; (2) second quarter estimated payments that would otherwise have been due on June 15, 2020; (3) 2020 LLC taxes and fees; and (4) 2020 non-wage withholding payments. Under the temporary FTB guidelines, all California first quarter estimated tax payments and second quarter estimated tax payments are now due July 15, 2020.
- For California, the extension generally applies to all taxpayers affected by the COVID-19 pandemic. However, the FTB has said that a taxpayer does not need to be directly impacted; any taxpayer who experiences any difficulty in filing or paying tax as a result of COVID-19 is entitled to relief. For example, some taxpayers may not be able to get their tax returns prepared due to the unavailability of their paid tax preparers or through tax-free preparation programs. A quarantine or infection could also impact a taxpayer’s ability to file or pay on-time.
- The FTB has committed to continue processing tax refunds and issuing refunds.
- In many respects, these new extensions make an already complicated tax filing calendar and structure all the more convoluted. The current pandemic is ever-evolving, and accordingly changes by the federal and state governments are also occurring by the hour.
- Phase III of the federal coronavirus relief effort includes additional tax relief provisions, such as deferring payroll tax deposits. Stay tuned for more information. The CGS3 COVID-19 Task Force will distribute a separate alert soon with an overview and analysis of those provisions to help you digest the implications for your business.
As always, please contact us should you need assistance navigating these changes and determining the potential impacts on your business. Our team is ready to assist you in developing a comprehensive and proactive response to these tax changes as well as other COVID-19-related issues affecting the commercial real estate industry.
CGS3 Insight Alerts are curated with you in mind. They deliver focused, relevant, and timely information on trending topics to our clients, colleagues, and others in the industry. Please note that they are intended for general informational purposes only, and should not be construed as legal advice for any specific situation. Always remember to contact an attorney to obtain advice with respect to a particular issue or problem