Does the Stimulus package help in Tax Refunds for the NRIs in the US?

Does the Stimulus package help in Tax Refunds for the NRIs in the US?

Does the Stimulus package help in Tax Refunds for the NRIs in the US?

The Federal Government had been sending Stimulus checks to millions of Americans including the NRIs to alleviate the financial and economic stress created by the pandemic COVID-19. These stimulus checks have been of great help to those NRIs who have been struggling to meet their basic expenses due to either loss of work or business shut down because of COVID-19. 

If you are an NRI and have also received the Stimulus check, an obvious thought in your mind must be about the co-relationship between the Stimulus package and your tax refunds. There is a relationship between the Stimulus check you have received and your income tax; however, by the receipt of Stimulus check your tax refund would neither be decreased nor would your tax liability be increased.

How are Stimulus checks and Income taxes related?

The IRS is in charge of sending out the Stimulus checks to the NRIs and even it is the IRS that is responsible for all decisions associated with tax refunds and collection of payments for NRIs.This reason might cause apprehensions in your mind especially when you are an NRI and owe to pay taxes to the IRS.

However, you do not need to worry about your taxes about the receipt of the Stimulus checks. The Stimulus money is not considered as taxable income.

The Stimulus check you receive is not going to increase the amount of tax you owe to pay to the IRS while filing your tax returns for 2020. It is also not going to decrease your tax refunds to be obtained for the year 2020. The involvement of IRS and your tax filings are only involved here because of the reference they provide to your income which is a major factor in the determination of your Stimulus amount.

Your amount of Stimulus check would be calculated based on your federal tax return for the year 2018 or the year 2019. If your 2019 tax returns have been filed, then that would form the basis for the calculation of your stimulus payment otherwise the IRS would be using your tax return information of the year 2018. If you do not receive your Stimulus payment this year, you would be able to claim it next year while filing 2020 tax returns.

There might be a scenario in which your income has changed tremendously over the recent period. In such a case, the working procedure can be summarized as mentioned below.

  1. In case of your income being lower than that of your income in 2018 or 2019, the IRS would calculate your Stimulus payment based on your income of the year 2020. In this case, your Stimulus payment would be received after your income tax returns for the year 2020 are filed.
  2. If your income is on the higher side in 2020, then the IRS would not force you to pay back your Stimulus money and you would not even lose any money from your 2018 or 2019 refund.

In case of tax non-filers

If you have not filed your tax returns recently then

  1. If you are the recipient of Social Security benefits or are a military/railroad retiree then you can obtain Stimulus payment without the need to file your income tax returns.
  2. If you have not filed tax returns for 2018 or 2019 and have not received any federal benefits, you can obtain your Stimulus checks by filing the tax returns for 2019 or by using the IRS tool for non-filers.

Stimulus Payment- An advance on the tax refund or a Government benefit

a. Stimulus payment is not an advance income tax refund and it is not going to affect your tax refunds based on your 2019 or 2020 tax returns. Moreover, you will not have to pay back the Stimulus money.

b.Stimulus payment can be said to be a federal tax credit for 2020 or an advance of a refundable credit on your 2020 tax returns and can also be referred to as Stimulus rebate.

In case of this rebate, you would receive the payments immediately rather than waiting till next year unlike the Federal child tax credit or Earned Income Tax credit.

c. Your eligibility to receive Social security benefits or Unemployment benefits would not affect your Stimulus payment receipt.

Can Stimulus payment be seized?

  • Suppose you owe money to the Federal Government in the form of back taxes or student debt loans, your Stimulus payment would be safe by the process known as Federal offset.
  • But, the Federal Government can be able to take a portion of your entire Stimulus payment if you are overdue on Child support payments.
  • Some cases in which your Stimulus check can be seized are court orders to make certain payments through debt collectors or if you owe money to bank/credit unions in cases like an overdue auto loan, an overdrawn account, or a delinquent personal loan.

Conclusion

Hence, in these difficult times caused by the novel coronavirus, the Stimulus payments can be considered as a support system for those NRIs who are facing a financial crisis. You must remain informed about the various aspects related to the Stimulus payment and try to resolve your queries with the IRS in case of delay or troubles in obtaining your Stimulus check.

Top #10 things to know about IRS and its working amidst the pandemic

Top #10 things to know about IRS and its working amidst the pandemic

Top #10 things to know about IRS and its working amidst the pandemic

The outbreak of the pandemic COVID-19 has brought a tough time for everyone. With the economic lives of people being hugely affected due to the coronavirus, the US Government has taken various steps for providing relief to the Americans.The Coronavirus Stimulus Package under the CARES Act is one such major step taken by the Federal Government which would be of certain help to the Americans for dealing with financial issues arising due to the pandemic.

The Internal Revenue Service (IRS) has been playing a major role in the implementation of the various tax laws which have been passed recently by the Federal Government. Along with the normal course of operational activities of the IRS associated with filing of tax returns and their processing, it is also working tirelessly towards the determination and distribution of the Stimulus payments to the eligible taxpayers.

Let us have a look at the major 10 things which we should know about the operations and working of the IRS during the outbreak of COVID-19.

a.Information Center for all queries

The official website of the IRS i.e. IRS.gov/coronavirus is the first place where the taxpayers can find answers to all of their queries related to tax returns and stimulus payments.All updates associated with tax returns processing and stimulus package would be posted by the IRS therein this website. The taxpayers should avoid calling up the IRS and check out the IRS.gov/coronavirus website for tax updates amidst the pandemic. 

b.Limited live assistance from IRS

The phone lines of the IRS and the Assistance Centers for taxpayers are to be non-functional for an infinite period.The IRS hotlines including service as well as compliance hotlines such as automated under reporter, collection functions, etc. are not operational for long. Moreover, the IRS has suspended all compliance activities related to tax such as audit and collection till 15th July 2020.So, taxpayers and tax professionals should not worry about missing the tax deadlines. The Local Taxpayer Assistance Centers are also not operational currently. 

c.All audits to be put on hold

The IRS has announced that all new audits have been suspended and would resume only after 15th July 2020. But, it is quite obvious for the taxpayers to expect that the IRS must utilize the audit power it has to prevent the erroneous tax refunds.The IRS would be filing filters that would help in stopping suspicious refunds such as Earned Income Tax Credit Returns, suspected identity theft returns, etc. till the taxpayers would be able to verify the returns.So, this freezing of the refund audits will continue and would be troublesome for taxpayers as they will not be receiving any prompt response from the IRS.Moreover, taxpayers can take advice from the local Taxpayer Advocate Service Office in case of facing any queries due to the withholding of audits and refunds.

d.Temporary respite if a taxpayer owes tax

The IRS has halted the enforcement of any tax collection till 15th July 2020. Moreover, all the pending collection alternatives by the IRS and any offers related to compromises in tax laws are also on hold till 15th July 2020. According to the provisions of the People First Initiative, liens, levies, and any restrictions on passport have also been put on hold.

e.Difficulty in reaching out to the IRS even after COVID-19 is over

The IRS would even have its phone lines and hotlines non-functional after the pandemic is over.After the normal operations start, the resources of the IRS would be occupied with the backlog of tax filing issues and people trying to contact the IRS for other tax filing assistance. However, the IRS would be providing other means such as email or e-fax by which taxpayers would submit their documents.

f.Tax returns are still being processed by the IRS

The stimulus payments are being processed by using the information related to the tax returns of 2019 or 2018. If an individual has not filed his tax returns for 2019 or 2018, then this is the right time to do it now. The returns can be e-filed easily and can get accepted in a day without any inconvenience.

 

g.No requirement of monthly installment agreement payment

 Under the provisions of the “People First Initiative”, the IRS has announced that taxpayers can skip their monthly installment payment during the period of 1st April 2020 to 15th July 2020. This would not be considered as a tax payment default by the IRS.

 

h.Account-related queries can be sorted by IRS transcripts

Taxpayers can obtain their transcripts by creating an IRS account online, review these transcripts and get solutions to any queries related to issues like previous AGI, amount of penalty, amount of estimated tax payments, etc.

i.Any hardship-TAS can be reached

Any taxpayer facing financial hardships and having a hold on their tax refunds can contact their local advocate for suggestions. However, the central TAS hotline would remain closed.

j.Stimulus payment will not be used by IRS tax collectors

The IRS has made it clear that it would not use the stimulus payment of any individual for paying off of any tax debt owed by the individual taxpayer.Hence, the IRS is playing a commendable role in helping the common people in improving their economic lives during this difficult time.

References

https://www.accountingtoday.com/list/10-things-to-know-about-irs-operations-during-the-coronavirus-pandemic

https://taxfoundation.org/coronavirus-tax-tracker-covid19/

 

 

 

Top #10 most important things to know about the Economic Impact Payment Information Center

Top #10 most important things to know about the Economic Impact Payment Information Center

Top #10 most important things to know about the Economic Impact Payment Information Center

Under the provisions of the CARES (Coronavirus Aid, Relief and Economic Security) Act of the Federal Government, the citizens in the US have been receiving their Economic Impact Payments (EIP). The Economic Impact Payment which is being received by the Americans is calculated automatically by the IRS.

However, there are many Americans, who have several queries related to the Economic Impact Payments such as their eligibility, amount of payments, by when to expect the EIP, etc. The answers to these queries related to the Economic Impact Payments can be obtained by the common people at the Economic Impact Payment Information Center.

Some of the major things which Americans must know about the EIP Information Center can be listed below.

  1. Eligibility for Economic Impact payment 
  2. Request for EIP
  3. Calculation of EIP
  4. Receipt of EIP
  5. Non-Filer Tool
  6. Social Security
  7. Railroad retirement
  8. Recipients of the Department of Veteran Affairs benefit
  9. Additional Information
  10. Return of EIP

Americans Must Know About The EIP Information Center 

a.Eligibility for Economic Impact Payment

1.US citizens and US resident aliens who are filing tax returns as individuals or heads of households will be eligible for receiving EIP of $1200 whereas those who are married and are filing returns jointly would receive an EIP of $2400.

2. To receive EIP the taxpayers must not be the dependent of another taxpayer, should be having a valid Social Security Number and their AGI (Adjusted Gross Income) must be up to the given limits

  • For single individuals or married couples but filing tax returns jointly, the AGI should be up to $75000.
  • For those taxpayers who are filing tax returns as head of household filers, the AGI should be up to $112,500.
  • For taxpayers who are married and are filing their tax returns jointly, the AGI must be up to $150,000.

3. In case, an individual does not have a valid Social Security Number, is a non-resident alien or has filed Form 1040-NR, Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for the year 2019 will not be eligible to obtain the EIP.

b.Request for EIP

  1. If an individual has already filed the tax returns for 2018 or 2019, then there is nothing more to be done for receiving the EIP.
  2. The IRS would use the information of the 2019 tax returns for calculation of the EIP or would use the information of 2018 in case of non-filing of the 2019 returns.
  3. Taxpayers who have not filed returns for 2019 or 2018 can visit the IRS website and input their payment information in the link provided for Non-filers.

c.Calculation of EIP

  1. Individuals who are eligible for receiving EIP and are filing tax returns with a single status would receive $1200 as the EIP.
  2. If two individuals are filing their tax returns jointly, they are eligible to obtain an EIP of $2400.
  3. The eligible individuals would receive an additional $500 for each qualifying child who has been claimed during the filing of tax returns.

d.Receipt of EIP

  1. If an individual has received his tax refund for the year 2019 or the year 2018 in case of non-filing in 2019 by the method of Direct Deposit, then the IRS would use the latest information ad send your EIP by Direct Deposit.
  2. Moreover, in case of non-receipt of EIP through Direct Deposit the IRS would send the EIP to the mailing address present in the file of the IRS.

e.Non-filer Tool

  1. The Non-Filer: Enter Payment Info Here tool should be used for receiving EIP by those eligible individuals who have not filed tax returns for 2019 or 2018 and do not receive Social Security Retirement, Supplemental Security Income (SSI) or Survivor Benefits, Veteran benefits or any other benefits related to Railroad retirement.
  2. If you have filed your tax returns or you receive federal benefits, then the need for using the Non-filer tool is ruled out.

 

 

 

f.Social Security

The Social Security recipients who might not have filed tax returns for 2019 or 2018 but receive Form SSA-1099 will receive their EIP by the same method as that of the receipt of the Social Security Benefit.

g.Railroad Retirement

The recipients of Rail Road Retirement who might not have filed tax returns for 2019 or 2018 but receive the benefits by RRB-1099 will receive their EIP by the same method as that of the receipt of the Rail Road Retirement Benefit.

h.Recipients of the Department of Veteran Affairs benefit

The recipients of the Department of Veteran Affairs Benefit who might not have filed tax returns for 2019 or 2018 but receive Form SSA-1099 or RRB-1099 will receive their EIP by the same method as that of the receipt of the benefit.

i.Additional Information

Taxpayers need to be cautious about scam artists who would try to use the EIP as a strategy for performing other scams related to stealing. Taxpayers must remember that information about EIP can be obtained only by visiting the official IRS webpage and not by any calls, text, or emails.

j.Return of EIP

  1. For the return of EIP which was in the form of Direct Deposit, check, or money order; money order or personal check must be immediately sent to the IRS with information related to the SSN.
  2. If the payment was received in the form of a paper check, then it can be sent back to the appropriate section of the IRS by writing “Void” on the back of the check.

Hence, taxpayers can avoid calling up IRS for queries related to the EIP and rather visit the Economic Impact Payment Information center for resolving their queries.

Do I need to file my taxes to be eligible to receive a Stimulus check?

Do I need to file my taxes to be eligible to receive a Stimulus check?

Do I need to file my taxes to be

eligible to receive a Stimulus check?

In the US, the Federal Government had passed the CARES (Coronavirus Aid Relief and Economic Security) Act to bring some relief to the Americans who are struggling due to the outbreak of COVID-19. Under the CARES Act, the IRS announced that Stimulus checks would be issued to the individuals in the US for financial relief up to some extent.

According to the IRS, most of the Americans would be receiving their Stimulus checks automatically based upon the 2019 tax returns. The information of the 2018 tax returns would be considered if the 2019 tax returns have not been filed by an individual. The Stimulus payments would be done by the Direct Deposit method as it would help in sending the money faster. 

Who is eligible to obtain the Stimulus payment?

The majority of the American population would qualify to receive the Stimulus payment. The size of the Stimulus payment would depend on the Adjusted Gross Income (AGI) of the individuals.

For an individual who is filing his tax returns as a single filer and is having AGI below $75,000, the Stimulus payment received would be $1200. He would also receive an additional payment of $500 if he would claim a dependent below the age of 17 years. If the AGI of the single filer is above $75,000, then the Stimulus payment would reduce by $5 for every $100 increase in AGI above $75,000. Also, if the AGI of the individual is above $99,000 and no dependents are being claimed then the individual would not receive any Stimulus payment.

For married couples filing their tax returns jointly and are having an AGI below $150,000, the Stimulus payment received would be $2400. They would also be eligible to receive an additional payment of $500 by claiming a dependent below the age of 17 years. If the AGI of the couple is above $150,000, then the Stimulus payment would reduce by $5 for every $100 increase in AGI above $150,000. Also, if the AGI of the individual is above $198,000 and no dependents are being claimed then there would be no Stimulus payment received.

Need to file tax returns to obtain Stimulus payment

Let us talk about those instances where the filing of tax return is necessary to obtain the Stimulus payment.

  1. Self-employed individuals who have a net income of $400 or more must file their tax return as they would have to pay self-employment taxes on the income of $400 or more.
  2. Those taxpayers whose income is more than the income filing threshold as determined by the IRS need to file their tax returns for obtaining the Stimulus payment. This income filing threshold determined by IRS is $12,200 for single filers, $24,400 for married couples who are filing their tax returns jointly and $18,350 for filers filing returns as ‘Head of Household’. 
  3. Those dependents who have an unearned income of more than $1,100 and earned income more than $12,200 must file their tax returns for receiving the Stimulus payment.
  4. If an individual owes taxes on an IRA or Health Savings Account he will have to file his tax returns for obtaining the Stimulus checks.
  5. If an advance payment of the health coverage tax credit has been received by an individual, then he must file his tax returns.

Situations which rule out the need to file tax returns for receiving Stimulus payment

a.Social security recipients and the Railroad retirees who have not filed their tax returns for the year 2019 or 2018 do not need to perform any additional paperwork like filing a tax return for obtaining the Stimulus payment. The IRS would use the information from Form SSA-1099 and Form RRB-1099 respectively to obtain the information needed to send the Stimulus payment.

b.Those Americans who belong to the lower-income group or who have income below the tax filing threshold of IRS and have not filed tax returns for 2019 or 2018 must use the new web tool of the IRS. By using this tool, individuals can enter their basic information like Name, Address, SSN, Dependents, etc. This information would help in calculating and sending the Stimulus payment.

c.Recipients of Supplemental Security Income (SSI) will obtain their Stimulus payments automatically without the need for filing the tax returns. However, if they have qualifying dependents below the age of 17 years must use the web tool of IRS to claim the additional $500 payment.  This is also applicable for the Railroad Retirees and Social Security beneficiaries.

Hence, taxpayers don’t need to file tax returns for obtaining the Stimulus checks. It mainly depends upon the circumstances which determine the need to file the returns.

References

  1. https://blog.turbotax.intuit.com/tax-news/am-i-required-to-file-my-taxes-to-get-a-stimulus-check-46816/
  2. https://www.aarp.org/money/investing/info-2020/tax-return-coronavirus-stimulus-check.html

 

All you need to know about Stimulus Payment

All you need to know about Stimulus Payment

All you need to know about Stimulus Payment

The US President has signed a relief package of $2 trillion known as the Stimulus package which intends to provide relief to individuals and businesses that have been financially hit due to the outbreak of COVID-19. This Stimulus package would include sending of stimulus checks to most of the Americans, paid sick leave, unemployment benefits, student debt relief for a temporary period, etc. to alleviate the impact caused by the COVID-19.

Eligibility to obtain Stimulus payment

 

Mostly, all Americans would qualify to obtain some amount of money in the form of Stimulus payment. To obtain Stimulus payment, an individual should be having your Social Security Number and should not be dependent of someone else.

a.Individuals with a single filing status and having an adjusted gross income (AGI) of $75,000 or less would receive the full Stimulus payment of $1200.

When the AGI is above $75,000 then the Stimulus payment would reduce by $5 for every $100 income above $75,000. If an individual is earning more than $99,000 in a year then he is not eligible to obtain Stimulus payment.

b.Married couples who have an AGI of $150,000 or less are eligible to obtain the Stimulus payment. This payment would be $2400 for the married couples. If a couple has an AGI which is more than $150,000 and up to $198, 000 then the Stimulus payment reduces by $5 for every $100 rise in income above $150,000. Those couples who have an AGI of more than $198,000 are not eligible for obtaining Stimulus payment.

c.Those filers who are classified as ‘Head of Household’ and have an AGI of up to $112,500 are eligible to obtain Stimulus payment of $1200. If the ‘Head of Household’ filers has an AGI of up to $136,500 then reduced Stimulus payment would be available in those cases. Also, those ‘Head of Household’ filers who earn more than $136,500 is not eligible for obtaining Stimulus payment.

d.If you have children who are below the age of 17 years then you can receive an extra $500 for each child as the Stimulus payment.

Furthermore, according to an announcement made by the Treasury Department on 1st April 2020 those individuals who are on Social Security do not need to file a tax return for obtaining their Stimulus payment. Their Stimulus payment would be generated by reference to their Form SSA-1099 and Form RRB-1099. This is applicable for the senior citizens, railroad retirees and Social security recipients who do not file tax returns otherwise.However, if an individual is not on Social Security and does not have any income then he needs to file tax returns for obtaining Stimulus payment.

How to obtain the Stimulus payment?

Mostly, there is nothing much to be done by individuals for obtaining the Stimulus payment. If an individual has already filed his tax returns for 2019, then the Federal Government can easily calculate the Stimulus payment and send it. But, those individuals who have not filed their Income tax returns for 2019 must do it immediately to obtain the accurate Stimulus payment.  In case, if an individual does not file his tax return for 2019 then the IRS would use the 2018 AGI for determination of the payment which must be done as Stimulus payment.

Retirees can receive their Stimulus payment in the same way as they receive their Social security benefits i.e. by referring to Form SSA-1099.  If an individual does have to file a tax return and does not receive Social Security benefits as well, then he can obtain his Stimulus payment by using the ‘Tax Act’s Stimulus Registration’. This can be used to file the Stimulus only return for submission of the necessary information.  

How and by when the Stimulus payment would be received?

The Federal Government would send the Stimulus payment to the individuals by direct deposits. This would make the process faster. However, for those taxpayers who do not have the direct deposit option, the payment would be done by sending paper checks. The Government has started the Stimulus payments on 11th April 2020. According to the latest information, around 80 million payments have been already initiated and the process is going on in full fledge.

Additional information on Stimulus payment

  • The Stimulus payment received by individuals an advance refund or refundable credit based on the income of 2020 and is not taxable.
  • The Stimulus payment will not affect an individual’s refund for 2019 or the anticipated refund for 2020. Moreover, the IRS guidelines also ensure that even if an individual has obtained more Stimulus payment than the amount he qualifies based on his 2020 return he will not have to pay back any money.
  • If an individual has filed his 2019 return without using a direct deposit, he can use the web portal ‘Get My Payment’ to update the direct deposit information for obtaining Stimulus payment.

Hence, in these times of distress caused by the COVID-19 the Stimulus payments or otherwise known as Economic Impact Payments are sure to work as a support for the Americans who have been struggling lately due to economic disruption.

Reference

  1. https://blog.taxact.com/stimulus-payments-everything-to-know/
  2. https://www.forbes.com/sites/advisor/2020/03/27/your-guide-to-the-federal-stimulus-package/#7b7597d02711
  3. https://edition.cnn.com/2020/03/25/politics/stimulus-senate-action-coronavirus/index.html
  4. https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html
State and Local Tax relief laws for COVID-19

State and Local Tax relief laws for COVID-19

State and Local Tax relief laws for COVID-19

The novel coronavirus (COVID-19) is spreading rapidly with a huge toll on the lives of common people and the global economy as well. In the US, the number of people being affected by the COVID-19 is on an increase and has reached around 4 lakhs now. The number of people who have died due to COVID-19 in the US is approximately around 11,000. Similarly, many people have even lost their livelihoods due to the closing or the downfall of several businesses.

However, Tax relief laws the Federal Government has been extremely considerate towards the sufferings of the common people and has taken several initiatives for providing some relief to them. The income tax payment and return filing deadline for the taxes due on 15th April 2020 has been postponed to 15th July 2020 by the IRS. Also, several new laws have been implemented by the Federal Government for the support of individuals, small and medium scale businesses even. The Coronavirus Aid, Relief and Economic Security Act (CARES), Families First Coronavirus Response Act, Stimulus Package, etc. are some of the major initiatives taken by the Government for providing support and assistance to people. 

Tax relief laws by State Government  

In the US, the tax rules and laws associated with the Federal Government and the State Government are different from each other. In this distressful period, the State Government of different states of the country has announced various changes and new rules related to the tax laws.

Let us talk about some of the major tax relief laws imposed by the State Government in the different states to deal with the economic disruption caused by COVID-19.

Alabama

  • In Alabama, the Revenue Department has announced on provisions for tax relief to small businesses that would not be able to pay their Sales tax for February, March, and April. Those small retail businesses whose monthly sales in the previous year have been $62500 or less on average can have the liberty to file their sales tax return for February, March, and April without paying the State Sales tax. There will be a waiver of late tax payment penalties for these small retail businesses through 1st June 2020.
  • The deadline for motor vehicle registration and vehicle property tax payment for March 2020 has been extended through 15th April 2020. Moreover, tax relief would be available for State lodgings tax account holders who are unable to make their payment for February-April 2020.
  • The due date for payment and filing returns for 2019 Income tax and 2020 estimated Income tax which were due on 15th April 2020 has been extended to 15th July 2020.

California

  • The Income Tax deadline for return filing, payment for 2019 and 2020 estimated tax payments Quarter 1 and Quarter 2 has been extended to 15th July 2020. This is also applicable for 2020 LLC taxes, fees, and 2020 non-wage withholding payments. 
  • The Californian Employment Development Department (EDD) has declared that the employers in the State who have been impacted by COVID-19 can request a delay of up to 60 days in filing their State payroll reports or in the deposit of their payroll taxes without the payment of any penalty. The employers must provide a written request for this extension within 60 days of the original tax filing/payment due date.
  • Moreover, there has been an announcement on the deferral of business taxes for supporting small businesses that have been affected by the COVIS-19.

Connecticut

  • The Department of Revenue Services in Connecticut has extended the deadlines for filing the annual tax returns due on or after 15th March 2020 and before 1st June 2020 to 15th June 2020.
  •  Also, the tax payments which are associated with these tax returns have been extended to the due date available in June.
  • The personal income tax return filing deadline has been extended to 15th July 2020 and this extension is also applicable for estimated tax payments of 2020 Quarter 1 and Quarter 2.

Columbia

  • For income tax returns, the deadline for tax payment and return filing which was due on 15th April 2020 has been extended to 15th July 2020.
  • In the District of Columbia, penalties/interest will be waived for the failure of sales tax payment for a period that ends on 29th February 2020 or 31st March 2020 if all the taxes are paid completely on or before 20th July 2020. This waiver does not apply to hotels or motels which can defer property tax under another emergency legislation. 
  • This legislation states that hotels/motels can avail penalties waiver for the delay in payment of the property tax’s first installment of 2020 if the installment is paid by 20th June 2020.

Texas

  • In Texas, the Comptroller has declared that the sales tax collected in March 2020 would be remitted and would be available for emergency health care and other emergency operations for the people.
  • The Texan Comptroller has also insisted on the businesses in the State to make use of short term payment agreements for meeting the deadline of March 2020. 

Massachusetts

  • The Department of Revenue in Massachusetts has implemented an emergency regulation amendment. According to this amendment, the sales and use tax return filing and payment which are due for the period of 20th March 2020 to 31st May 2020 will remain suspended. These tax return filing and tax payments would be now due for 20th June 2020. 
  • Marijuana retailers, marketplace facilitators or motorcycle vendors are not included within this amendment. Any penalties or interest would be waived but the accumulation of statutory interest will continue.

Virginia

  • In Virginia, the Department of Taxation has announced that all the income tax payments which are due from 1st April 2020 to 1st June 2020 can be paid at the Department anytime on or before 1st June 2020. If all the payments are received by 1st June 2020, then the Department would waive all penalties for late payment otherwise penalties would start accumulating from the original payment due date. 
  • However, interest would also keep accruing from the original due date of payment. Some of the taxes which are eligible for this extension and waiver are individual, fiduciary and corporate income taxes and any estimated income tax payments in this period.  The State provides an automatic filing deadline extension for all the taxpayers for six months.  Also, the Department of Taxation would consider requests for sales tax dealers who would request an extension in the sales tax payment and return filing which was due on 20th March 2020 and would extend it till 20th April 2020.

Montana

  • The Montana Revenue Department would assess the situation of taxpayers on a case-by-case basis and might permit the deferral of tax payments for up to one month at an instance. 
  • The taxpayers must contact the Tax Collection Bureau by email, phone or mail at least one week before the actual due date of payment for making a deferral request.
  • The 2020 estimated tax payments for the first quarter have been extended to 15th July 2020 and the second quarter payment is also due on 15th July 2020.

Conclusion

Hence, along with the Federal Government, these are some of the tax relief laws/rules implemented by the different states. Taxpayers can communicate with their respective State tax agencies for complete details on the amendments made in their respective tax laws for COVID-19. These rules and amendments in State tax laws would act as a support for the distressed individual taxpayers or businesses in coping up with the economic disruptions.

References

https://tax.thomsonreuters.com/news/tax-relief-offered-by-states-and-localities-in-response-to-covid-19/?utm_campaign=T_CPE_NSL_9017597_covid19news_20200406_PR_EM1&utm_medium=email&utm_source=Eloqua&site_id=82769734&cid=9017596&chl=em&sfdccampaignid=7014Q000002SW4xQAG&elqTrackId=8432E59EA486AE4E4F693C86C8DF092E&elq=1fca5b09cc9e4a48adaa952eec158059&elqaid=22686&elqat=1&elqCampaignId=16486

https://www2.deloitte.com/us/en/pages/tax/articles/covid-19-state-and-local-tax-due-date-relief-developments.html