California Special Tax Relief

On March 13, 2020, the California Franchise Tax Board (FTB) announced special tax relief in response to the COVID-19 pandemic. Affected business and individual taxpayers are granted an extension to file 2019 California tax returns and make certain payments, until June 15, 2020. This relief is in line with the Executive Order issued by the Governor on March 12, 2020. The extended California deadline of June 15 may be pushed back even further if the Internal Revenue Service grants a longer relief period.

What about the IRS?

The White House and the Treasury Department have indicated they intend to postpone the filing deadline. However, the IRS has not yet issued an official notice or any guidance on the issue.

Caution: To be safe, we suggest filing extensions for all your calendar-year partnerships and S corporations today.

California’s extension

The relief includes moving various tax filing and payment deadlines that occur to June 15, 2020, including:

• Partnerships and LLCs that are taxed as partnerships whose tax returns are due on March 15th now have a 90-day extension to file and pay by June 15th.
• Corporations and individual filers whose tax returns are due on April 15th now have a 60-day extension to file and pay by June 15th; and
• Quarterly estimated tax payments due on April 15th now have a 60-day extension to pay by June 15th.

How to claim the benefit

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, follow the software instructions to enter disaster information. The software may need some time to reflect on these recent changes.

Who qualifies?

According to the FTB, a taxpayer does not have to be directly impacted to qualify for relief. Taxpayers who experience any difficulty in filing or paying, as a result of COVID-19, are included in this relief.