As you know, in response to the pandemic caused by COVID-19 the IRS has extended the deadline for filing income taxes from April 15 to July 15 in an effort to provide relief to taxpayers. The 90-day extension will have significant impact on Pennsylvania individual taxpayers, including estates and trusts, which are required to report income on PA-41.
By state law, the Pennsylvania individual income tax (PIT) deadline is tied to the federal individual income tax deadline. The code states that, “every taxpayer … shall file a tax return on or before the date when the federal income tax return of the taxpayer is due.” So when the IRS extended its deadline to July, the PIT return deadline was automatically extended as well.
As with the filing date, the PIT payment deadline was also extended to July 15. According to guidance provided by the Pennsylvania Department of Revenue (Department), payments submitted by July 15, 2020 will incur no late penalties nor accrual of interest. Some practitioners, however, question whether the Department can actually waive the accrual of interest absent legislation allowing them to specifically do so.
Estimated Payments for 2020
The federal extension will likely have no impact on current due dates of estimated tax payments for PIT taxpayers, since Pennsylvania laws pertaining to due dates are not tied to the federal code. PA HB 1232 has been approved by both the Pennsylvania House of Representatives and Senate. If Governor Wolf signs the bill, the Department will then be allowed to extend the deadlines of estimated tax payments for individuals.
HB 1232 also would have a significant impact on PA-20S/PA-65 filers. The proposed legislation would expressly give the Department authority to extend the statutory deadline for these taxpayers instituted under Sec. 330.1(B) and Sec. 335(C) of the PA Tax Reform Code of 1971, since these deadlines are also not currently tied to the federal deadline.
Our tax advisors will continue to monitor state legislation. If you have questions about how the extended tax deadline affects your taxes, contact your State and Local Tax professional at Schneider Downs today.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.