IRS Guidance On Fed and State Coronavirus-Related Filing and Payment Extensions

The IRS has clarified that only payments actually due on April 15 are delayed. Therefore, first quarter 2020 estimated income tax payments and transition tax installment payments due April 15 are postponed until July 15, but June 15 estimated tax payments are not.

This means the relief does not apply to estate and gift taxes or payroll and excise taxes or to information return filings.

If you are a Fuoco client who has already filed their return and scheduled a payment for April 15th, that payment will not be automatically delayed to July 15, but we can cancel a payment and reschedule it to July 15 if needed.

Taxpayers who cannot file and pay their tax by July 15 should file for an extension until October 15 and pay the tax they estimate is due when they file the extension request, which they have until July 15 to do.

We have been asked questions about retirement plan deadlines that are delayed by the extension. First, IRA contributions for 2019 can be made until July 15, and 10% additional tax on early distributions is due July 15, when the taxpayer pays his or her income tax. Likewise, contributions to health savings accounts for 2019 can be made as late as July 15.

State deadlines and COVID-19 rapid response items addressed here:

The state has suspended its legislative session until at least March 30 but is still scheduled to adjourn on May 6. Lawmakers must still take up the budget and will also likely consider bills to lessen the coronavirus’ effect on the state’s economy. The state has announced it will follow the IRS in delaying income tax filing and payment deadlines from April 15 to July 15. The state is also extending deadlines for the filing and payment of other income-related business taxes due between March 15 and June 1.

The legislature extended its 60-day session, which was originally scheduled to end March 13, in order to finalize a $93.2 billion budget for fiscal year 2021. The budget, which was approved unanimously by legislators on March 19 before they adjourned for the year, dedicates $300 million in reserve funds to address COVID-19 and earmarks $25.5 million in FY 2020 and $27.3 million in FY 2021 for coronavirus response. The budget has been sent to the governor, who has line-item veto authority.

New Jersey
The Assembly has canceled all committee hearings except those focused on coronavirus legislation, and on March 16 passed a package of 29 coronavirus response measures which the Senate is scheduled to take up March 19. The state has not yet passed a budget for FY 2021. Last night, New Jersey passed a law providing that it will grant the same tax extension as the federal government but no later than June 30th. New Jersey’s June 30th extension applies to returns due on or before April 15th and for returns filed under the New Jersey Gross Income Tax Act and the Corporation Business Tax Act. The law does not explicitly grant an extension of time to pay but it may give the Director of the Division of Taxation the ability to grant such an extension.

New York
Gov. Andrew Cuomo has signed legislation dedicating $40 million to combat the coronavirus outbreak. The state is currently working on a budget, and the chair of the Assembly Ways and Means Committee has tested positive for the virus. The Assembly and Senate suspended session for two days but went back into session March 18, passing legislation requiring all public employers, as well as private employers with at least 100 employees, to provide 14 days of paid sick leave. As of March 23, the Senate and House are suspended but have signaled no plans to adjourn for an extended period of time. New York’s income tax filing and payment deadlines are tied to the federal deadline, so both deadlines have been extended to July 15 by New York State Budget Director Robert Mujica. The state is not extending its sales tax payment deadline, but is waiving late payment penalties.

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