Responding to the COVID-19 pandemic and the federal national emergency declaration, both the federal and New York State governments have extended tax filing and tax payment deadlines for certain taxpayers.

Federal Tax Relief

On March 21, 2020, the Department of the Treasury and the Internal Revenue Service released Notice 2020-18. This Notice provides that federal income tax payments (including income tax quarterly estimated payments) due April 15, 2020 and federal income tax returns due to be filed on April 15, 2020 are automatically postponed until July 15, 2020. No additions to tax, interest or penalties will be imposed for failing to file an income tax return or failing to pay income tax unless the filing or payment remains outstanding on July 16, 2020, at which time penalties and interest will begin to accrue.  The Notice expressly provides that such relief does not apply to any other tax returns or payments; this means gift tax returns, estate tax returns and GST tax returns still must be filed and the corresponding taxes still must be paid.  Subsequently issued FAQs confirm that entities having fiscal year-ends resulting in income tax returns and payments due May 15, 2020 and June 15, 2020 do not fall within the scope of the relief provided in the Notice.

New York State Tax Relief

New York State officials have indicated the state will follow the lead of the United States Department of the Treasury and the Internal Revenue Service in providing automatic extensions for filing and payments of income tax returns and income tax due April 15, 2020.

Following Governor Cuomo’s Executive Order 202.8, the Department of Taxation issued Notice 20-1.  This Notice provides that the state will abate interest for taxpayers required to file and remit sales and use tax as of March 20, 2020 for the tax quarter ending February 29, 2020 so long as taxpayers file the returns and pay the taxes within sixty (60) days of the due date.

This relief only applies to taxpayers unable to timely file and pay sales and use tax returns as a result of the COVID-19 virus, due to reasons including:

  • The absence of key employees being treated for or suspected of contracting COVID-19;
  • The unavailability of the taxpayer’s key records due to COVID-19;
  • The difficulty of the taxpayer to meet the required deadlines due to closure orders or other business disruptions due to COVID-19; and
  • The inability of tax practitioners to complete returns on behalf of the taxpayer due to COVID-19.

This relief is not available to sales tax vendors participating in the Promptax program relating to sales and use tax on fuel.

Taxpayers may request further interest and penalty abatements by visiting the Department of Taxation website and following the instructions in the section entitled Tax Department response to novel coronavirus (COVID-19).

Published guidance from New York State regarding income tax filing and income tax payments is expected.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.