The economic fallout from the coronavirus crisis has federal, state and local governments scrambling to offer relief to taxpayers, who are expected to face a severe cash flow crunch in the coming months. Every day brings new announcements and new proposals. It can be a bit confusing to sort it all out. Here’s what we know so far:
- Deferred Until July 15: Income tax filings and payments for businesses and individuals. Interest and penalties are waived. The extension is automatic; it is not necessary to file for it.
- Currently Due on the Usual Schedule:
- Payroll tax and withholding filings and payments
- Gift and estate tax filings and payments
- Excise tax filings and payments
- Second Quarter and Beyond:
- Q2 filings, tax deposits and estimated payments currently remain due by June 15 2020
- Legislation currently under consideration would postpone all tax filings and payments until October 15, 2020
Tax officials in the tristate (NY/NJ/CT) area initially indicated that they would likely follow the federal government’s lead on revised deadlines. However, only Connecticut has taken definitive action as of the date of this alert.
- New York: Has not yet changed filing and payment deadlines.
- New Jersey: Has not yet changed its filing deadline. Pending legislation would postpone the April 15, 2020 filing/payment deadline to no later than June 30, 2020.
- Connecticut: Has postponed April 15, 2020 business filings/payment for passthroughs, UBITs and corporations to June 15, 2020. A press release indicates that it will follow the IRS filing/payment deadlines for individuals.
New York City
New York City has announced a waiver of penalties – but not interest – for two classes of taxes due between March 16, 2020 and April 25, 2020:
- Business and excise taxes
- Real property transfer taxes
Waivers are not automatic and must be requested.
What To Do
- If you are expecting a refund, file your federal income taxes as usual. The IRS is not currently projecting a delay in the normal 21 day turnaround for refunds.
- If you are a NY or NJ taxpayer, be prepared to file on time – or to file an extension. Note that if you are paying late, you will incur interest and penalties.
Resources & Relief
A number of relief measures are being considered at the federal, state and local levels. We will monitor developments and keep our clients informed as appropriate. So far, we are aware of one program that may be of interest to some clients:
New York, New Jersey and Connecticut have been approved for disaster status. The Small Business Administration is accepting applications for disaster loans of up to $2 million.
- Business must have fewer than 500 employees
- Must have been “severely impacted” by the coronavirus
- Interest: 3.75% for-profits; 2.75% nonprofits
- Repayment Period: up to 30 years (evaluated on a case by case basis)
- Limitations: must be used for current expenses going unpaid because of the disaster
More information is available here.
As always, your AKM CPA is ready to assist or advise you. Please be in touch if we can be of service.