The Franchise Tax Board (FTB) announced special tax relief for California taxpayers due to the COVID-19 pandemic. Per the announcement, all California taxpayers now have until July 15, 2020 to both file their 2019 California tax returns and make certain payments.
Effectively, the FTB postponed the filing and payment deadlines for all individuals and business entities for:
- 2019 tax returns
- 2019 tax return payments
- 2020 1st and 2nd quarter estimate payments
- 2020 LLC taxes and fees
- 2020 non-wage withholding payments
The move gives taxpayers a deadline consistent with that of the Internal Revenue Service (IRS) without the federal dollar limitations. On March 20, 2020, the IRS announced Tax Day has been postponed from April 15 to July 15. Taxpayers now have until the summer deadline to file their federal tax returns and submit payments.
The FTB encouraged taxpayers to continue to file tax returns on time to receive their refunds in a timely manner, including claiming the Earned Income Tax Credit and the Young Child Tax Credit. Throughout this public health crisis, the FTB continues to process tax returns, issue refunds, and provide phone and live chat services to taxpayers needing assistance.
***Please note the July 15 deadline is changed from a previous FTB announcement released last week. In line with Governor Gavin Newsom’s March 12 Executive Order, the FTB previously extended the due dates for filing and payments for affected taxpayers until June 15. The announcement released March 18 indicating a July 15 deadline and a wider application of the extension supersedes the previous announcement of June 15.
Are there any other state tax implications I should be aware of?
State Payroll Taxes
Employers statewide directly affected by the COVID-19 pandemic may request up to a 60-day extension from the Employment Development Department (EDD) to file their state payroll reports and/or deposit payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC). The EDD must receive a written request for extension within 60 days from the original delinquent date of the payment or return.
Additional local support may be available. For example, on March 11, San Francisco Mayor London N. Breed announced measures to support small businesses in San Francisco experiencing a slowdown due to COVID-19. Among the provisions put in place is the deferral of the next round of quarterly business taxes. For more information on the San Francisco guidelines, please reference here. For other local jurisdiction information, please refer to your relevant authorities.
What about those not in California?
The American Institute of Certified Public Accountants (AICPA) produced a State Tax Filing Guidance for Coronavirus Pandemic. For up-to-date information on a state-by-state basis, you can find their guide here.
How can Squar Milner help?
Situated in California, we are acutely aware of the current tax situation throughout the state. We have an experienced and diligent State and Local Tax Services team to assist you with your state and local tax filings. Our team is prepared to help you navigate the deadline adjustments.
Disclaimer: This material has been prepared for informational purposes only, and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.