Coronavirus Tax Relief

Last Edited: March 20, 2020 – 11:51am

Federal Tax Payment Extension:

 At a press conference held yesterday in the James Brady Briefing Room, Treasury Secretary Mnuchin issued a statement to reassure taxpayers of the Treasury’s commitment to provide relief to taxpayers amid the COVID-19 pandemic.  At 3:30pm today, the IRS released Notice 2020-17 both confirming the proposed relief and providing additional clarification.  The relief provides Affected Taxpayers, the ability to defer payment of up to $1 million of taxes ($10 million for C corporations) originally due on April 15, 2020, for a period of 90 days interest-free and penalty-free.  As such, Affected Taxpayers will have until July 15, 2020 to satisfy their income tax obligations.  Because the relief was not described as a specific extension of the filing deadline, it is still advisable to file an extension before the April 15th deadline.

Clarified in the Notice is that relief applies to both 2019 tax payments and estimated tax payments due April 15, 2020.  Note:  The $1 million and $10 million limits apply to total payments eligible for deferral.

Proposed Stimulus and Financial Relief:

On March 16th, the House of Representatives passed an update to the Families First Coronavirus Response Act (H.R. 6201) that would offer financial relief to certain employees and employers affected by the current pandemic.  The March 16th updates were made as technical corrections and amendments to the House Bill which previously passed on March 14th.  The revised House Bill provides for up to 80 hours of paid sick leave time and modifications to benefits provided under the Family Medical Leave Act for employees.  Self-employed taxpayers could receive equivalent benefits through tax credits.

The House Bill would also provide relief to eligible employers in the form of 1) tax credits for, and 2) relief from FICA and Medicare taxes on qualified wages paid under the Emergency Paid Sick Leave Act.

In addition, the Senate is currently working on a federal stimulus package (estimated to be around $850 billion) announced by the President to provide additional benefits to taxpayers.  The stimulus may include the payment of $1,000 to each adult taxpayer (likely subject to certain income limitations) in an attempt to provide some financial stability during these uncertain times.

Maryland Taxpayer Update:

Following through with statements made in his March 11th briefing that Maryland would follow the federal government in providing relief to Maryland Taxpayers, Maryland Comptroller Franchot announced yesterday that Maryland will extend the April 15th deadline until July 15, 2020 for all business and individual income taxpayers.  No penalties or interest will be assessed if taxpayers pay the outstanding balances by July 15th.  Further, the filing date for income tax returns will automatically be extended (no forms needed) for those taxpayers under a federal extension.  The deadline extension to July 15th has also been provided for those taxpayers with a fiscal year ending January 1, 2020 through March 31, 2020.

A copy of the specific announcement can be found at Maryland Announces Income Tax Deadline Extended to July 15, 2020

The income tax deadline extension comes on the heels of Comptroller Franchot’s extension of certain non-income business related tax filings to June 1, 2020 on March 11th.  This extension covered certain business tax returns with filing dates falling in the months of March through May 2020 (e.g. sales tax, admission and amusement tax, withholding taxes, etc.)

Maryland Taxpayer Update – Sales and Use Tax:

The Comptroller of Maryland wants to remind businesses that the March 20th Maryland Sales and Use Tax deadline has been extended to June 1.  The Comptroller announced further that businesses that had already paid their Maryland Sales and Use Taxes for March early may request a refund of their payments. Refunds may be requested by emailing  taxpayerrelief@marylandtaxes.gov or by calling 410-260-4020.

A copy of the specific announcement can be found at https://content.govdelivery.com/bulletins/gd/MDCOMP-2824359?wgt_ref=MDCOMP_WIDGET_C7

We will continue to provide updates as more information becomes available.  Should you have questions, please reach out to a Hertzbach advisor today.