After some confusion and patchwork extensions, the IRS issued Notice 2020-23 which provided a somewhat blanket extension for most income tax returns. Basically, any federal returns typically due between April 1 and July 15 are extended until July 15, 2020 without any need for an official extension or late payment penalty. The filings covered is too long to list here, but includes income tax returns for businesses, individuals, trust, estates, and non-profits. While you do not have to file an extension, if you think you may not be able to file your taxes by mid-July, you may want to file Form 4868 (individuals) or Form 7004 (businesses) to further extend your due date to September 15 (businesses) or October 15 (individuals) to be safe.
Additionally, the IRS also stated that the 2nd quarter estimated tax payments are now also due July 15. Previous to this statement, we were otherwise going to have an odd situation where 1st quarter payments – normally due April 15 – would be due July 15, while 2nd quarter payments would still be due on their normal date of June 15. In short, federal estimated tax payments otherwise due April 15 and June 15 are now both due July 15.
Connecticut Tax Extensions
The Connecticut Department of Revenue Services (DRS) has extended most deadlines to July 15 as well (except most business returns which are due June 15) and here is some information that you may need for planning purposes.
- Individual Income Tax: The deadline for personal tax returns has been moved from April 15 to July 15. If you pay quarterly estimated payments, both your first and second quarter payments are due on July 15 too.
- Sales & Use and Room Occupancy Tax: The DRS has extended filing and payment deadlines for sales tax and room occupancy tax returns for taxpayers that have $150,000 or less in annual liability for these two taxes.
- For monthly Sales Tax and Room Occupancy Tax filers: returns and payments due March 31, 2020, and April 30, 2020, are extended to May 31, 2020.
- For quarterly Sales Tax and Room Occupancy Tax filers: returns and payments due April 30, 2020, are extended to May 31, 2020.
- Other Returns and Payments Automatically Extended to July 15: Other than the ones mentioned above, nearly all other types of returns have been extended to July 15, including:
- Trust & Estate returns, estimates & payments
- Pass-through Entity returns, estimates & payments
- Corporate tax returns, estimates & payments
- Gift tax returns & payments
- Unrelated business income tax returns, estimates & payments
If you have questions about something you don’t see listed here, you can refer to the CT DORS website or call us.
Connecticut Unemployment Benefits
For the week of April 4, the Connecticut Department of Labor (CDOL) processed benefits payments for nearly 104,000 claimants for more than $35 million. Not surprisingly, this is a massive increase over the claims processed prior to COVID-19. In fact, the number of applications the CDOL has seen in the last few weeks represent more than they would typically handle in 18 months. This has led to a six week (or more) backlog, but the CDOL urges patience as all claims will be processed, paid and retroactive to the date they were filed.
If you have filed, make sure you are checking your email frequently, including your junk and spam folders for updates. If you haven’t filed but need to, visit this site and click first on the message above the large blue button that notes, “for quicker payment of unemployment benefits, please follow these instructions.”
Direct deposits of economic impact (or stimulus) payments started hitting some accounts last night. The remaining payments will be rolled out over the next few weeks. If you want to check on the status of yours, you can visit the page.
Keep in mind that the amount of the payment is determined based on 2019 tax return data, if that return as been filed, or 2018 tax return data if you haven’t yet filed for 2019. Payments are up to $2,400 for married couples filing joint returns and $1,200 for single taxpayers. If your adjusted gross income is over $75,000 (single) / $150,000 (joint) / $112,500 (head of household), your advanced relief payment is reduced by $5 for every $100 over the threshold, and at $99,000 (single) / $198,000 (joint) / $136,500 (head of household), you do not qualify for a payment.
If you have any questions at all about your specific situation, don’t hesitate to reach out to us for help. Things are changing at breakneck speed, so keep in mind that while we do our best to create updates as often as possible, there may be changes that take place after this information is published. Your best option is always to check with us or the official government websites.