California Extends Filing & Payment Deadlines to July 15th for Millions of Taxpayers; Waives Interest & Penalties
On March 19th, California Governor Gavin Newsom requested broad-based federal support to help address the immediate and devastating economic disruption the outbreak of the novel coronavirus (“COVID-19”) is having on Californians. Acknowledging that California’s families were already struggling with a crisis in the cost of living due to a variety of ongoing factors, Governor Newsom implored Congress to provide “substantial economic intervention” to help middle-class families avoid failing into poverty. As Californians wait for Congress to provide anticipated aid, the State’s taxing authorities have taken steps to give California taxpayers extra time to file their tax returns and pay any amounts due.
On March 13th, the Franchise Tax Board (“FTB”), which administers California’s personal income tax and corporation tax programs, announced special tax relief that included a 60-day extension of time to file and pay certain taxes for California taxpayers affected by the COVID-19 pandemic. On March 18th, the FTB expanded the timeline and breadth of this relief to be consistent with the extended federal payment deadlines described in Notice 2020-17. Specifically, California has postponed until July 15th the filing and payment deadlines for all individuals and business entities for:
- 2019 Tax Returns
- 2019 Tax Return Payments
- 2020 1st and 2nd Quarter Estimated Payments
- 2020 LLC Taxes and Fees
- 2020 Non-Wage Withholding Payments
Although the FTB is extending this relief to all California taxpayers and has indicated that there is no need to claim any special treatment or call the FTB to qualify, the FTB previously instructed taxpayers to write “COVID-19” in black ink at the top of their tax returns.
The California Department of Tax and Fee Administration (“CDTFA”), which administers California’s sales and use tax program, plus other special tax and fee programs, announced that, through May 11th, it has the authority to assist individuals and businesses impacted by complying with social distancing measures related to COVID-19 in the form of granting extensions for filing returns and making payments, providing relief from interest and penalties, and considering claims for refund.
The California Economic Development Department (“EDD”), which administers California payroll tax program, announced that California employers directly affected by the COVID-19 pandemic may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit payroll taxes without penalty or interest. Taxpayers must submit a written request for extension, which must be received by the EDD within 60 days from the original delinquent date of the payment or return.
At the County level, various local representatives have indicated that property tax filing and payment deadlines will remain unchanged, keeping those returns and payments due on April 10th. Although most counties require property tax taxpayers to remit payment in full on or before the deadline, certain counties (e.g., Santa Clara County and Los Angeles County), have indicated that they will accept partial payments on property tax bills. Whereas, traditionally, county tax collectors would return partial payments and impose penalties and interest on the entire amount due, these counties have indicated that they will accept partial payments and will impose penalties and interest on only the balance due after application of the partial payment. The property tax filing and payment deadline is established and set by statute by the state. Taxpayers should monitor state updates for relief that could extend deadlines or otherwise provide benefit for property tax taxpayers.