The spread of the novel coronavirus (COVID-19) has wreaked havoc on a multitude of industries. As we face the uncertainties of this very unprecedented time, governmental agencies are enacting new programs and legislation in an effort to alleviate growing financial concerns.
On March 21, 2020, the Treasury Department and Internal Revenue Service announced that the federal tax filing due date has been automatically extended from April 15, 2020 to July 15, 2020. The benefit of this extension is that all taxpayers, including individuals, trust, estates, corporations and other non-corporate tax filers, as well as those taxpayers who are required to pay self-employment tax, (“Affected Taxpayer”) have the ability to defer any federal income tax payments which would have been due on April 15, 2020, to July 15, 2020, without incurring penalties and interest, regardless of the amount due and owing. Absent a further automatic extension, penalties, interest or additional tax for failure to file federal tax returns by July 15, 2020, will begin to accrue on July 16, 2020.
It is important to note that although the federal tax filing extension does not automatically apply to each state, New York State has followed suit and is extending its tax filing deadline to July 15, 2020. Additionally, according to a bulletin sent by the New York State Department of Taxation and Finance on March 29, 2020, the deadline for all taxpayers to make payments that otherwise would have been due on April 15, 2020 is extended to July 15, 2020, and there will be no penalties or interest incurred as a result of such delayed payments.
The New York City Department of Finance (“DOF”) has also taken steps to alleviate various financial concerns during this pandemic. The DOF issued a Memorandum advising that there will be a waiver of penalties for Department of Finance administered business and excise taxes due between March 16, 2020 and April 25, 2020. Under these rules, there will be no underpayment, late filing or late payment penalties. Despite these waivers, interest, where applicable, is not being waived. As such, any interest payment, which is calculated from the original due date to the date of payment, must be paid on all tax payments that are received after the original due date.
As the days pass with only “essential businesses” being permitted to stay open and the rest of the workforce “working from home” to the extent possible, we expect that additional programs and initiatives will be implemented to assist various businesses in an effort to restore financial stability to the economy.