Governor Newsom signed an Executive Order on Thursday, March 12 stating that state tax filing deadlines have been extended by at least 60 days for California individuals and businesses unable to file a timely tax return or make a timely payment as a result of complying with a state or local public health official’s imposition or recommendation of social distancing measures related to COVID-19 (“affected taxpayers”).
Franchise Tax Board (FTB) Tax Assistance – Income and Franchise Taxes
Affected taxpayers are granted an extension to file 2019 California tax returns and make certain payments until June 15, 2020. This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020 through June 15, 2020 to June 15, 2020. This includes:
- Flow-through entities whose tax returns are due on March 15 now have a 90-day extension to file and pay by June 15
- Individual and C-corporation filers whose tax returns are due on April 15 now have a 60-day extension to file and pay by June 15
- Quarterly estimated tax payments due on April 15 now have a 60-day extension to pay by June 15
Taxpayers claiming the special COVID-19 relief should write the name of the state of emergency (for example, COVID-19) in black ink at the top of the tax return to alert the FTB of the special extension period. If taxpayers are e-filing, they should follow the software instructions to enter disaster information. The FTB will also waive interest and any late filing or late payment penalties that would otherwise apply.
The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service (IRS) grants a longer relief period. For example, if the IRS provides a 90-day extension until July 15 for tax returns and payments due April 15, then the California deadline would be extended until at least July 15. Updated guidance for California and other states may be found here.
Please note it is unclear if the immediate extension of income tax deadlines will provide for changes to extended due dates at this time. For example, extended due dates of Sept. 15 and Oct. 15 may or may not be extended based on the guidance from state and federal governments.
California Department of Tax and Fee Administration (CDTFA) Tax Assistance – Sales and Use Tax and Other Indirect Taxes
Affected taxpayers may request assistance for sales and use tax and other tax filings by contacting the CDTFA. Requests for relief of interest or penalties or requesting an extension (i.e., 60-day) for filing a return may be made through the CDTFA online services. Taxpayers may also request assistance in writing by contacting the CDTFA via email.
Employment Development Department (EDD) Tax Assistance – Payroll Taxes
Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received by the EDD within 60 days from the original delinquent date of the payment or return. For the address to send the request, along with other information, please see the State of Emergency or Disaster Fact Sheet (DE 231SED) (PDF).
The FTB, CDTFA and EDD have not released specific guidance for COVID-19 situations where respective tax deadlines would be extended. Our expectation is that if taxpayers are unable to file returns or make timely payments due to business closures, lack of workforce or inability to access required information for tax filings, then the extension may apply. Please reach out to your tax advisor if you have any questions or if you believe this extension applies to your circumstances.