COVID-19 IRS Press Releases
Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed
IR-2020-58, March 21, 2020
WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.
Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.
The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.
“Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically,” said IRS Commissioner Chuck Rettig. “Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience. I’m incredibly proud of our employees as we navigate through numerous different challenges in this very rapidly changing environment.”
The IRS will continue to monitor issues related to the COVID-19 virus, and updated information will be posted on a special coronavirus page on IRS.gov.
This announcement comes following the President’s emergency declaration last week pursuant to the Stafford Act. The Stafford Act is a federal law designed to bring an orderly and systematic means of federal natural disaster and emergency assistance for state and local governments in carrying out their responsibilities to aid citizens. It was enacted in 1988.
Treasury and IRS will issue additional guidance as needed and continue working with Congress, on a bipartisan basis, on legislation to provide further relief to the American people.
Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave
IR-2020-57, March 20, 2020
WASHINGTON — Today the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.
Paid Sick Leave for Workers
For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.
Employers receive 100% reimbursement for paid leave pursuant to the Act.
- Health insurance costs are also included in the credit.
- Employers face no payroll tax liability.
- Self-employed individuals receive an equivalent credit.
Reimbursement will be quick and easy to obtain.
- An immediate dollar-for-dollar tax offset against payroll taxes will be provided
- Where a refund is owed, the IRS will send the refund as quickly as possible.
Small Business Protection
Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.
- Requirements subject to 30-day non-enforcement period for good faith compliance efforts.
To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.
The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.
Paid Sick Leave Credit
For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.
For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
Child Care Leave Credit
In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
Prompt Payment for the Cost of Providing Leave
When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.
Small Business Exemption
Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.
Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.
For More Information
For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.
IRS: High-deductible health plans can cover coronavirus costs
IR-2020-54, March 11, 2020
WASHINGTON — The Internal Revenue Service today advised that high-deductible health plans (HDHPs) can pay for 2019 Novel Coronavirus (COVID-19)-related testing and treatment, without jeopardizing their status. This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).
In Notice 2020-15 (PDF), posted today on IRS.gov, the IRS said that health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. The IRS also noted that, as in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP.
Today’s notice applies only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their own plan and what it covers should contact their plan.
ADMINISTRATIVE NOTICE 2020-16
Extension of April 15, 2020 Due Date for Filing 2019 Annual Income Tax Returns Due to the COVID-19 Outbreak
The West Virginia State Tax Department is providing special tax filing and payment relief to individuals and corporations whose 2019 annual income return is due April 15, 2020. This extension is in response to the coronavirus (COVID-19) outbreak.
Filing deadline: The deadline to file 2019 annual income tax returns for individuals, trusts or estates, and corporations has been extended from April 15, 2020, to July 15, 2020. This extension does not apply to any other tax collected by the Tax Commissioner.
Estimated tax payments: This relief also extends to estimated tax payments for tax year 2020 that are due between April 15, 2020 and June 15, 2020 for individuals, trusts or estates, corporations, and pass-thru entities. They too will be due July 15, 2020.
Relief Limited to Income Tax: This relief does not apply to employer withholding tax returns and payments or to any other tax collected by the Tax Commissioner.
No Filing of Extension Request Needed: The Department will automatically provide this relief, so filers do not need to take any additional steps to qualify for this extension of time.
Payment deadline: Payment relief for individuals and corporations. Income tax payment deadlines for individual and corporate annual income returns with a due date of April 15, 2020, are extended until July 15, 2020. This payment relief applies to all individual income tax returns, income tax returns filed by C corporations, and income tax returns filed by trusts or estates with a statutory due date of April 15, 2020. The Department will automatically provide this relief, so filers do not need to take any additional steps to qualify for this extension of time.
Penalties and interest: Failure to pay any balance of tax due by July 15, 2020 will result in the accrual of penalties and interest beginning July 16, 2020. Individuals, trusts and estates, and corporations that request an extension of time to file to October 15, 2020, must still pay any liability by July 15, 2020 to avoid the accrual of interest and penalties. Calculation of the underpayment of estimated tax penalty, and associated interest, will be calculated on the estimated payments due during the period April 15, 2020 to July 15, 2020 using the date of July 15, 2020.
Issued: March 26, 2020
Dale W. Steager
State Tax Commissioner
Tax Commissioner’s Office, 1001 Lee Street East, P.O. Box 11771, Charleston, WV 25339-1771
IMPACT OF COVID-19 ON MARYLAND TAX FILING
On March 5, 2020, Governor Lawrence J. Hogan, Jr. proclaimed a state of emergency and a catastrophic health emergency related to COVID-19.
The following tax alert addresses actions taken by the Governor and the Office of the Comptroller of Maryland due to the unprecedented situation caused by the COVID-19 pandemic.
Extension of Time for Income Tax Filing and Income Tax Payments
Due to the COVID-19 pandemic and associated restrictions on activity, the federal government extended the deadline for filing 2019 income tax returns and submitting 2019 income tax payments by 90 days, to July 15, 2020. Maryland individual, corporate, pass through entity, and fiduciary taxpayers are afforded the same relief at the Maryland level. Unlike the federal extension, which included only those taxpayers who owed under a certain amount of tax, the Maryland extension applies to all taxpayers.
By law, 2019 tax returns for businesses and individuals are due no later than April 15, 20201. However, if the Comptroller finds that good cause exists, the Comptroller may extend the time to file an income tax return2. Due to the state of emergency, the Comptroller finds that good cause exists to extend the time to file an income tax return. The deadline to file a 2019 income tax return is July 15, 2020. Interest and penalty shall be assessed on any unpaid tax from July 15, 2020 until the date the tax is paid.
Fiscal year filers with tax years ending January 1, 2020 through March 31, 2020 are also eligible for the July 15, 2020 extension for filing returns and payment. The due date for March quarterly estimated payments of 2020 taxes is also extended to July 15, 2020.
The extension to July 15, 2020 for filing of returns and payment of 2019 taxes is automatic; no filing or request is required to take advantage of the extended deadline. Individual taxpayers who are paying by check or money order should submit their payment, along with Maryland Form PV, by July 15, 2020. As always, if no tax is due and you requested a federal extension, you do not need to file a Form PV or take any other action to obtain an automatic six-month extension to file your Maryland tax returns.
1 Tax General Article § 10-820(a)(1)
2 TG § 10-823
The extension for filing of returns and payment of income tax owed also extends the statute of limitations for filing a claim for refund of income tax.
The extension for filing returns and payment of income tax does not affect the filing of estate tax returns or the payment of estate tax.
Electronic filing continues to be the most efficient way to file taxes and to request a refund. iFile and bFile, on the Comptroller’s website, allow you to file individual and corporation income tax returns electronically for free.
Cessation of collection efforts
Pursuant to the proclamation of a state of emergency and a catastrophic health emergency the Governor issued an Order, dated March 12, 2020, entitled “Extending Certain Licenses, Permits, Registrations, and Other Governmental Authorizations, and Authorizing Suspension of Legal Time Requirements.” Pursuant to certain authority granted to the Comptroller under the Annotated Code of Maryland and the Governor’s Executive Order, the Comptroller is suspending the following provisions of the Annotated Code of Maryland, Tax General Article (“TG”) §13-601(a), (b); § 13-701(a), (b); and §13-807; §13- 811(c),(e) related to the Comptroller’s cessation of collection efforts. This cessation is effective immediately and shall continue until 30 days after the lifting of the state of emergency by the Governor.
Pursuant to this action, the Comptroller’s office will not send out lien warning notices, issue liens, attach bank accounts, hold up the renewal of any license including Maryland driver’s licenses, or offset vendor payments for Maryland taxes. Taxpayers receiving notices from the Comptroller’s Office during the current COVID-19 crisis should contact the telephone number or email address on the notice for additional information. Further, taxpayers who are currently on a payment plan for delinquent business and/or income taxes and are unable to make those payments due to the COVID-19 crisis should contact this office at the following to discuss delaying payments:
Business taxpayers: email@example.com Individual income tax taxpayer: COVID19@marylandtaxes.gov
To allow this Office to respond quickly to requests for delaying payments, Comptroller Franchot suggests
that the following information is provided:
Individual Taxpayers: name, address, daytime phone number and the last four digits of the taxpayer’s social security number;
Business Taxpayers: business name, contact name, daytime telephone number, central registration number (CR) or federal identification number (FEIN).
Extensions for Other Business Taxes
Electronic filing remains the most efficient way to file Maryland business tax returns. bFile allows you to file many business tax returns online for free.
Sale and use tax
Generally, sales and use tax returns are due on or before the 20th day of the month that follows the month in which a vendor made a retail sale3. The payment of sales and use tax must accompany the return4. The Comptroller may extend the time to file a sales and use tax return for reasonable cause5. The Comptroller has extended the time to file sales and use tax returns for sales taking place in February, March, and April of 2020 to June 1, 2020. Sales and use tax returns, and their accompanying payments, are due no later than June 1, 2020.
Do not combine sales for separate reporting periods into a single return. Instead, please file the separate returns reflecting the sales and the tax collected for each filing period as if they had been filed according to their original due dates.
Generally, every employer must withhold estimated income tax from employees’ wages and submit estimated payments to the Comptroller6. Due to the state of emergency, any withholding payments due for periods including February, March, and April 2020, may be submitted by June 1, 2020, without incurring penalties or interest.
Do not combine withholding for separate reporting periods into a single return. Instead, please file the separate returns reflecting the tax withheld for each filing period as if they had been filed according to their original due dates.
Admissions and amusement tax
The due date for returns and payments of admissions and amusement tax is usually the 10th day of the month that follows the month in which the person has gross receipts subject to the admission and amusement tax, and for other periods that the Comptroller specifies by regulation7. The payment must accompany the return8. The Comptroller is authorized to abate late charges for cause shown. Abatements may be made by the Comptroller without a request if qualification can be determined on an automated
3 TG § 11-502(a)(1)
4 TG § 11-601
5 TG § 11-503
6 TG § 10-906
7 TG § 4-201
8 TG § 4-301
basis9. The Comptroller has determined that penalty will be abated on admissions and amusement returns and payments for gross receipts from February, March, and April 2020, so long as the returns and payments are submitted by June 1, 2020.
Do not combine admissions and amusement tax for separate reporting periods into a single return. Instead, please file the separate returns reflecting the admissions and amusement tax collected for each filing period as if they had been filed according to their original due dates.
A person who holds a Class E, F, or G alcoholic beverage license must file an alcoholic beverage tax return by the 25th day of the month following the month the person sells any alcoholic beverage10. Manufacturer and wholesaler returns are generally due by the 10th day of the month that follows the month the manufacturer or wholesaler sells an alcoholic product11. Resident and nonresident dealers’ returns are due by the 15th day of the month following a month in which a nonresident dealer delivers beer into the state12. Direct wine shippers must file alcoholic beverage returns quarterly13. Payment of the alcoholic beverage tax, in the manner prescribed by the Comptroller, must accompany the return14.
However, due to the state of emergency, alcohol tax returns (both those that include payments and those that do not include payments) covering sales in February, March, and April 2020, may be submitted no later than June 1, 2020, without incurring penalties or interest.
Beer taxes must be prepaid15. However, the Comptroller may increase or decrease the amount of prepayment16. Due to the state of emergency, beer tax payment may be paid as late as June 1, 2020, without incurring penalties or interest.
In general, manufacturers’ tobacco tax returns and payments are due by the 15th of each month, reporting the previous month’s activity17. Manufacturers must submit payment with the return18. Due to the state of emergency, manufacturers’ returns for activity from February, March, and April 2020 are now due no later than June 1, 2020. No interest or penalty will be imposed if returns and payments are submitted by June 1, 2020.
9 COMAR 03.06.03.03
10 TG § 5-201(a)(1)
11 TG § 5-2-1(b)(1)(i)
12 TG § 5-201(c)(1), (e)
13 TG § 5-201(d)
14 TG § 5-301
15 COMAR 03.02.01.01.A.(3)
16 COMAR 03.02.01.01.B(4)
17 COMAR 03.02.04.01.B(1)
18 TG § 12-302(a)
Do not combine tobacco tax for separate reporting periods into a single return. Instead, please file the separate returns reflecting the tobacco tax remitted for each filing period as if they had been filed according to their original due dates.
Cigarette and other tobacco products wholesalers’ returns and payments are due by the 21st of the month that follows the month in which the wholesaler took possession of the product19. Due to current circumstances, returns and payments for products to which wholesalers took possession in February, March, and April 2020, are due no later than June 1, 2020. Wholesalers who first possess in the state unstamped cigarettes must pay the tax by buying and affixing tax stamps20. Wholesalers must continue to purchase and affix tax stamps to products that will be sold; wholesalers may not sell unstamped cigarettes.
Licensed retailers and tobacconists must file returns with payment quarterly for tax liabilities in the preceding quarter21. Generally, liabilities incurred between October 21 and January 21 are due by April
21. Due to the state of emergency, returns and payment for liabilities incurred between October 21, 2019, and January 21, 2020, are due no later than June 1, 2020. No interest or penalties will be imposed if returns and payment are submitted by June 1, 2020.
Motor carrier and motor fuel taxes
Motor carrier and motor fuel tax returns and payments otherwise due in March, April, or May 2020, may be submitted no later than June 1, 2020, without incurring penalty or interest22.
Do not combine motor carrier or motor fuel for separate reporting periods into a single return. Instead, please file the separate returns reflecting the tax for each filing period as if they had been filed according to their original due dates.
Tire recycling and Bay restoration fees
Tire recycling reports and fees are submitted semi-annually in January and July. As such, no change to the tire recycling reports and fees due date will be made at this time.
Bay restoration fees due in March, April, and May 2020, may be paid no later than June 1, 2020, without incurring interest or penalties.
19 TG § 12-202(a)
20 TG § 12-302(b)
21 TG § 12-302(d)
22 TG § 9-207(a)
Unclaimed Property Reporting for Insurance Companies
Unclaimed property reports and payments for insurance companies for each calendar year are due by April 30th of the following year23.
The deadline to report and pay unclaimed property for insurance companies for calendar year 2019 is extended to July 31, 2020. Companies should continue to report the unclaimed property amounts and make payment at the same time.