April 14, 2020

State and Local Tax Update: Extension to File and Pay Conformity

By John Bonk, Director, Tax & Business Services & Alex Toback, Staff Accountant, Tax & Business Services

State and Local Tax Update: Extension to File and Pay Conformity State & Local Tax

As the April 15 tax deadline approaches, it is important for both individuals and businesses to be mindful of states’ conformity to the IRS’ decision to grant extensions to file and/or make payment. Most states conform to the federal guidelines related to an extended due date for filing and payment of July 15, 2020.

While many states have issued guidance on these matters, the guidance can be confusing and, if misconstrued, can cause interest to accrue. Following is a summary of key issues pertaining to the filing and payment of certain state guidance which, as of this writing, have not conformed to the federal rules:

Individuals

  • Idaho – The due date was extended to June 15.
  • Mississippi – The due date was extended to May 15.
  • New Hampshire – Per the New Hampshire Department of Revenue Administration, only “certain qualified taxpayers” required to file an Interest and Dividends Tax Return will only be granted an extension. For previous tax years, an automatic extension to file was granted as long as a taxpayer remitted an extension payment by April 15. Taxpayers qualifying for additional relief are those whose 2018 total tax year liability was $10,000 or less.
  • New Jersey – Proposed Bill S-2338 extending the time to file and pay has passed the legislative process and is awaiting Governor Phil Murphy’s signature. While the bill proposes to extend the due date for filing and payment to July 15, until it is signed the due date remains April 15. (Governor Murphy has communicated that he plans to sign the extension bill before April 15).
  • North Carolina – Per guidance released by the North Carolina Department of Revenue, an extension until July 15 to file and pay has been granted. What may be misinterpreted, though, is that North Carolina law does not permit interest to be waived. Interest will begin to accrue as of April 15.
  • Virginia – Per guidance released by the Virginia Department of Taxation, an extension to pay was granted until June 1, 2020; however, an extension to file was not granted. Therefore, state tax returns are still due by May 1.

In summary, it would be advisable to continue filing the respective individual tax returns in New Hampshire, New Jersey, North Carolina, and Virginia by April 15. Additionally, while states that do not conform to the federal extended date of July 15 do not require immediate attention, the returns/extensions are required to be filed before the federal deadline of July 15.

C-Corporations

  • Arkansas – While Arkansas has extended filing and payment due dates for individuals, they have not done so for corporate income tax. Currently, the corporate income tax filing and payment deadline remains April 15. In alignment with corporate income tax policy, the filing date for Arkansas’ franchise tax also has not been extended. The filing due date remains May 1.
  • Florida – Florida Department of Revenue has not offered concrete guidance for corporate taxpayers. Since guidance has not been released, the conservative (safe) approach is to proceed on the assumption that an extension to file will not be granted. The filing due date remains May 1.
  • Idaho – The due date was extended to June 15.
  • Massachusetts – Massachusetts Department of Revenue has not granted corporate excise taxpayers an extension to file and pay; however, penalties for filing and paying late will be waived through July 15. While a penalty waiver for filing and paying late is being offered, interest will begin to accrue on April 15.
  • Mississippi – The due date was extended to May 15.
  • Minnesota – While the Minnesota Department of Revenue has issued guidance on extension to file and pay for individual income tax, the corporation franchise tax still has yet to be extended. The due date for corporate franchise tax returns is “the same as federal corporation tax returns,” according to the department. As of this writing, Minnesota has not officially released guidance granting an extension to file or extension to pay. In order to keep a conservative approach, corporate franchise taxpayers should continue filing returns as if the due date is April 15.
  • Montana – The Montana Department of Revenue has not offered concrete guidance for corporate income taxpayers. Since guidance has not been released, the conservative approach is to proceed on the assumption that an extension to file will not be granted. The filing due date remains May 15.
  • New Hampshire – Per the New Hampshire Department of Revenue Administration, only “certain qualified business taxpayers” required to file business profit tax and business enterprise tax returns will be granted an extension to pay. For business tax purposes, a “qualified taxpayer” would be a taxpayer whose total 2018 tax liability was $50,000 or less.
  • New Jersey – Proposed Bill S-2338 extending the time to file and pay has passed the legislative process and is awaiting Governor Phil Murphy’s signature. While the bill proposes to extend the due date for filing and payment to July 15, until it is signed the due date remains April 15. (Governor Murphy has communicated that he plans to sign the extension bill before April 15).
  • New York City – New York City has not extended its business tax due date, and therefore, if there are balances due that are not paid by April 15, a penalty abatement request will need to be made. New York City will charge interest on unpaid balances from the original due date to the date paid.
  • North Carolina – Similar to rules for individual taxpayers, North Carolina does give corporate taxpayers an extension til July 15 to file and pay their income and franchise tax returns; however, interest will begin to accrue on April 15 since North Carolina law does not allow interest to be waived.
  • Virginia – Similar to guidance for individual taxpayers, the Virginia Department of Taxation has agreed to an extension to pay, but not to file 2019 business tax returns. The due date to file remains April 15.

The above includes a summary of certain state filing rules as of this writing. As we approach the April 15 deadline, it is advisable for corporate taxpayers to review the applicable filing dates as indicated above. Additionally, taxpayers should note due dates which may be earlier than July 15.

Please contact your Marcum State and Local Tax professional to address any questions regarding these filings or any other tax matter or contact John Bonk at 954.320.8112 or email John.

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