Dear Clients and Prospects:
First and foremost, we are here to support you and your businesses during this challenging time. As the Covid-19 situations unfolds we continue to monitor the latest tax law changes and incentives for businesses and employers. Below is a summary of the more recent changes regarding the April 15, 2020 tax filing requirement.
Federal Tax Update:
Effective March 13, 2020 the IRS granted a 90-day relief for the payment of Federal income taxes originally due on April 15, 2020. This is not an extension of Filing only an extension of payment for income taxes. The Treasury department would like everyone to file a return or apply for an extension of time to file their income tax returns by April 15, 2020.
There is no extension for any other type of federal tax or the filing of any tax return or information return. So please continue to remit your Employer taxes and quarterly payroll taxes and other federal taxes and information reporting timely.
Federal Relief Details:
- Postponement of only Federal Income tax to July 15, 2020
- C corporations limit is $10M of income taxes per consolidated group
- All other taxpayers regardless of filing status the limit for tax payment deferral is $1M
- Relief is solely for Federal income tax payments (including payments of tax on self-employment income) that are due April 15, 2020.
- This includes 2019 balances due AND 2020 Quarter 1 Estimated tax installments.
- Interest and penalty or failure to pay taxes will begin to accrue on July 16, 2020.
Maryland Tax Update:
On March 18, 2020 the State of Maryland also announced a 90-day extension of the April 15th payment of tax. Taxpayer MUST file for an extension for the filing of Federal taxes by April 15th. Maryland will honor the federal extension of filing for the April 15th deadline.
Additionally, Maryland has offered an extension of all business-related tax filing deadlines to June 1, 2020. This extension applies to certain business returns with due dates during the months of March, April, and May 2020. This includes business filings for sales and use, withholding, admissions & amusement, alcohol, tobacco, and motor fuel taxes, as well as tire recycling fee and a by restoration fee returns. Businesses who file and pay by June 1, 2020 will receive an automatic waiver of interest and penalties.
Questions:
If you have any questions regarding what your current tax filing and payment obligations are please contact us!
Sincerely,
McLean, Koehler, Sparks & Hammond
