Federal Tax returns, Individual, Corporate and Fiduciary due 7/15. Payments due 7/15. April and June Estimated tax payments due 7/15.
Virginia Tax returns due June 1. Payments due 5/1. Estimated taxes due normal time.
Maryland and DC follow Federal Rules.
“At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
On March 19, 2020, Governor Northam made the following announcement:
“Businesses impacted by COVID-19 can also request to defer the payment of state sales tax due tomorrow, March 20, 2020, for 30 days. When granted, businesses will be able to file no later than April 20, 2020 with a waiver of any penalties.
The Governor has requested that the Department of Taxation to extend the due date of payment of Virginia individual and corporate income taxes. While filing deadlines remain the same, the due date for individual and corporate income tax will now be June 1, 2020. Please note that interest will still accrue, so taxpayers who are able to pay by the original deadlines should do so.”
So, business can request sales tax deferral for 30 days and avoid penalties (not interest). Query whether they will grant it quickly or you won’t find out for 60 days. Individuals still have to file on time, but now have an automatic 30 day extension to pay as well. Still accrues interest. I guess a slice of bread is better than no bread at all.
The IRS has NOT issued any guidance allowing for late filing or payment. We are waiting to see if there was anything in the newly passed COVAD relief bill once it is passed. Neither Virginia nor DC have allowed extensions for any taxes as yet. That means despite pledges to assist small businesses, Sales Tax filings, Withholding tax filings, and payments will all be due as usual. Remember that intentional failure to pay withholding tax liabilities or sales tax liabilities creates personal liabilities to those making that decision be they owners, or employees. It does not matter if the business is a limited liability company or a corporation, the liability attaches if you prefer other creditors to the tax authorities. So, don’t ignore or put off those obligations.
What does that mean for your taxes? Will they try and roll back the 2017 Federal Tax cuts by decoupling from the Federal Income tax? Or will they simply raise rates on sales, income and gasoline taxes? Budget desires include increased Medicaid funding, infrastructure, and schools. Because the Virginia Constitution requires a balanced budget, the only solution will be to raise taxes. There are really no other states to flee to from Virginia if you work here. Perhaps Tennessee and Kentucky. West Virginia, Maryland and DC all have higher tax rates than Virginia. Retirees may start spending 184 days in Florida. And for high wage earners most of these tax increases will not be deductible on your Federal income taxes. So, if you live in Virginia be prepared.