Want a down and dirty cheat sheet on federal and Louisiana state tax relief in response to the coronavirus (COVID-19)? Like all things tax related, there are lots of nuances, but here’s the skinny.
IRS extends time to file tax returns and pay taxes:
- The federal income tax filing date is automatically extended to July 15, 2020. No extension requests required.
- All taxpayers can also defer federal income tax payments due on April 15, 2020 to July 15, 2020.
- For extensions beyond July 15, 2020, individual taxpayers must file a Form 4868 and businesses must file a Form 7004.
- If you are due a refund, file as soon as possible. Most tax refunds are still being issued within 21 days. Consider filing electronically to expedite further.
Tax credits to small and midsize businesses for the costs of providing coronavirus-related employee leave:
- The Families First Coronavirus Response Act (enacted March 18, 2020) created federal paid sick leave for COVID-related needs and expanded the Family and Medical Leave Act (FMLA) to include paid leave for employees caring for children whose schools or child care facilities are closed because of the virus.
- Businesses with fewer than 500 employees are entitled to a refundable tax credit:
- 100% of the qualified sick leave wages paid. Capped at $511 per day ($200 per day if the leave is for caring for a child or family member) for up to 10 days per employee.
- 100% of the qualified FMLA wages paid. Capped at $200 per individual up to $10,000 total.
- Health insurance costs are also included in the credit.
IRS lets high-deductible health plans (HDHPs) cover coronavirus costs:
- Under Notice 2020-15, HDHPs can pay for novel COVID-related testing and treatment, without jeopardizing their tax status.
- Vaccination costs count as preventative care and can be paid out of an HDHP.
Charitable contribution deductions expanded:
- For tax years beginning in 2020, individuals who do not itemize deductions can nonetheless include an above-the-line deduction of up to $300 for qualified charitable contributions.
IRS collection activities generally on hold through at least July 15th:
- Payments due between April 1 and July 15, 2020 under existing Installment Agreements are suspended. But interest will continue to accrue.
- The IRS will consider new Installment Agreements for taxpayers unable to fully pay their federal taxes.
- The IRS is taking several steps to help taxpayers in various stages of the Offers in Compromise (OIC) process. Taxpayers have until July 15th to provide requested additional inform for a pending OIC and won’t close any pending OIC request before then without the taxpayer’s okay. You can suspend payments on accepted OICs, but interest will still accrued.
- Liens and levies will be suspended during this period, and new delinquent accounts won’t be forwarded to private collection agencies during this period.
- The IRS generally won’t start new field, office or correspondence examinations or audits during this period.
Louisiana extends time to file and pay for various taxes:
- Filing and payment deadline for 2019 income tax returns, partnership returns, consumer use tax returns, and franchise tax returns is extended to July 15, 2020. Any extension requests beyond then will be to December 15, 2020 for corporate returns and November 15, 2020 for individual, fiduciary and partnership returns; however, interest and penalties will accrue beginning July 16, 2020 on any balance due.
- The deadline for income or franchise tax return and payment due between March 1 and May 30, 2020 is extended by an additional 60 days.
- The filing and payment deadline for the February 2020 sales tax period is extended to May 20, 2020. But you can’t use Parish E-File or Sales Ta Online filing system for this relief. You must submit by LaTAP or paper filing.
- Filing and payment deadline for wine and beer tax for the February 2020 excise tax period is extended to May 20, 2020.
- All tax assessments are suspended effective March 16, 2020 through at least April 13, 2020.
- Collection activities by distraint and sale on delinquent taxpayer accounts is suspended through April 13, 2020. But interest and penalties will still accrue.
- The Louisiana Tax Commission has suspended all appeal hearings without date, but will meet by phone to consider special requests.
- The filing deadline for LAT forms (annual property tax renditions) is extended to April 13, 2020. But check with your local tax assessor also.
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If you can’t satisfy a current installment agreement or weren’t able to negotiate a satisfactory collection alternative with the IRS or other tax collector, this might be a good chance for negotiating a collection alternative based on changed circumstances from the health crisis.
Call Caroline D. Lafourcade at (504) 585-7641 or (504) 251-2441, or send an e-mail to firstname.lastname@example.org, if you have questions or need advice on any tax matter.