Coronavirus Related Tax Deadline Changes for Californians
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During this time of year, many California companies are focused on reviewing first-quarter performance in account management, sales numbers, and overall profitability. Time is spent determining the effectiveness of the tactics identified in the strategic plan and necessary adjustments and changes are made to ensure ongoing success. However, this year is very different. The arrival of coronavirus (COVID-19) has led to drastic changes impacting companies across virtually every industry. Restaurants are no longer open for eat-in dining, bars are closed, malls are operating on restricted hours, and gyms have been ordered to close. These changes have arisen from a deep concern about preventing the spread of the coronavirus. Along with the above-listed changes, various state and federal tax payment deadlines have also changed. To help clients, prospects, and others, JLK Rosenberger has provided a summary below.
Tax Deadline Changes
Federal Deadline Payment Extended, Filing Deadline Remains
Although the filing deadline for federal taxes remains April 15, 2020, the payment deadline has changed to July 15th. Secretary of Treasury Steve Mnuchin announced on March 17th the IRS will permit taxpayers to delay federal tax payments for 90-days after their standard due date. This delay is both interest and penalty-free and permits individuals to defer up to $1M and corporations up to $10M in taxes owed. The Trump administration noted that many individual taxpayers will receive a refund and are encouraged by the Trump administration to file before the April 15th deadline.
California Deadlines Extended
On March 13th, the California Franchise Tax Board announced special tax relief for California taxpayers impacted by the coronavirus, which includes an extension to file 2019 returns to June 15th, 2020. The relief includes moving tax filing and payment deadlines, which traditionally occur between March and June, to June 15th, 2020. This change impacts the following deadlines, including;
- All Partnerships and Limited Liability Companies (LLCs) that are taxed as partnerships now have a 60-day extension to file and pay any taxes owed.
- Individual taxpayers, who are normally required to file on April 15th, also have a 60-day extension to file and pay taxes.
- Quarterly estimated tax payments, which are due on April 15th, have received the same 60-day extension.
There will be a waiver for any late filing or payment penalties that would otherwise apply. The Franchise Tax Board has indicated they may push back due dates even more if the IRS grants a longer relief period.
Given the magnitude of the situation and the government’s quick response, it’s likely there will be additional tax relief available to Los Angeles and Orange County companies. For example, there is a payroll tax holiday being proposed, but nothing has been finalized. If you have questions about the information outlined above or need assistance with a tax planning or compliance issue, JLK Rosenberger can help. For additional information, call us at 949-860-9902, or click here to contact us. We look forward to speaking with you soon.