California taxpayers receive extensions, other tax relief
California taxpayers and employers have been offered extensions, penalty waivers, and other forms of tax relief in the wake of the COVID-19 coronavirus outbreak.
Most recently, on April 2, Gov. Gavin Newson announced a 12-month deferral of sales and use tax up to $50,000 for businesses with less than $5 million in annual taxable sales.
On March 30, the due date for the first-quarter returns was automatically extended to July 31, 2020, for all businesses filing a return with less than $1 million in tax.
Additionally, taxpayers were granted an extension until July 15 for the following items:
- Claims for refund
- Notices of proposed assessment protests
- Appeals or petitions for rehearing filed with the California Office of Tax Appeals (OTA)
Earlier, on March 18, the Franchise Tax Board (FTB) updated its previously announced special tax relief by postponing the filing and payment deadlines until July 15 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
While earlier guidance said to indicate the extension when filing, the extensions are now automatic; no action is required.
Also on March 18, the California Office of Tax Appeals (OTA) announced an automatic 60-calendar-day extension for taxpayers to file briefing or other documentation for appeals that have briefing or other deadlines between March 1 and May 18, 2020. The extension adds 60 calendar days to any OTA deadline to submit briefing, additional briefing, supplemental briefing, requested documentation, perfected appeals, petitions for rehearing, and/or perfected petitions for rehearing. Taxpayers with current appeals before OTA do not need to take any action to request the extension. The OTA is also currently maintaining its scheduled hearings in Sacramento, Los Angeles, and Fresno. Taxpayers who request an oral hearing can either have the hearing by phone, have it postponed, or have the decision based on the written record.
On March 12, pursuant to an Executive Order issued by Gov. Gavin Newsom regarding the pandemic, the California Department of Tax and Fee Administration (CDTFA) announced it is providing relief by granting extensions for filing returns and making payments, relief from interest and penalties, and filing claims for refunds. Taxpayers can make their requests online, in writing, or by email.
Also on March 12, the Employment Development Department (EDD) granted tax relief for employers directly impacted by the emergency. Employers may request an extension of up to 60 days to file their state payroll reports and deposit state payroll taxes with EDD, without incurring interest or penalty charges. State payroll taxes include unemployment insurance, employment training tax, state disability insurance and personal income tax. A written extension request must be made with EDD, pursuant to Section 1111.5 of the California Unemployment Insurance Code, along with previously unfiled reports and/or payments. The request should also provide detail regarding the reason for the late filing.
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
On-Demand Webinar: Mitigating Coronavirus Disruption
Webinar: Bolster Finance and Operations Against Coronavirus Disruption
Coronavirus Resource Center
InsightMaryland 2021 first quarter filing and payment due dates extendedJohn Iannotti, Marissa McClainRead how Maryland has changed due dates for corporate and pass-through entity income tax, sales and use tax, estimated income tax, and more due to COVID-19.
InsightHOSPITALITY: Food delivery ‘marketplace facilitators’ may complicate restaurants’ sales tax collectionJohn Iannotti, Suzanne WilsonSome food delivery services are collecting sales tax on sales facilitated for restaurants or other sellers. Learn what risks and complications that may bring.