Times are tough, and life under COVID-19 is taxing people’s nerves, focus, and finances. The federal government was quick to help address that by allowing taxpayers to delay filing their 2019 tax returns — and their payments — for three months.
Local governments in Massachusetts may soon get the ability to extend their usual fourth-quarter real estate tax deadlines by a month and waive late penalties for businesses and residents.
But so far there is no relief from Massachusetts state taxes by the Baker administration. And that, unless the situation is remedied, makes the federal move to delay tax day to July 15 something of a hollow gesture.
Sure, for taxpayers who are due a refund, it makes all the sense in the world to file both state and federal returns as early as possible. (Now, there’s a way to occupy all that in-home quality time.)
But for individuals and small businesses whose taxes are considerably more complex and who anticipate eventually having to write a check to the state or federal government, including for interest or capital gains, that extra three months announced by the Trump administration will certainly come in handy.
But because of the failure of the Baker administration to follow suit, it truly is only half a loaf.
This is the way the Tax Foundation put it in a statement: “States which do not extend their filing deadlines to July 15 will negate much of the benefit of the federal extension, because taxpayers would still have to prepare much of the relevant tax information — a great deal of it drawn from their federal 1040s — by the earlier date.”
At least 17 of the 43 states that have an income tax, plus the District of Columbia, have already moved to extend their deadlines. Baker administration officials have reportedly told lawmakers that delaying the deadline will shift between $2 billion and $3.5 billion into the next fiscal year, creating cash flow problems. But the state’s new fiscal year begins July 1, so one practical solution is to delay only to, say, June 30, which a handful of states have already done.
The Baker administration this week did announce the filing of legislation aimed at helping cities and towns cope with a variety of issues raised by COVID-19 and its virtual stranglehold on the local economy. Among those proposals would be the ability to extend the usual May 1 fourth-quarter real estate tax payments to June 1 and waive penalties for late filing.
It would also allow extensions to the deadlines for filing for property tax exemptions.
The wide-ranging package will need legislative approval.
Meanwhile, the state Department of Revenue website offers only the timely reminder that anyone can file for an “automatic” extension of filing for as long as six months, but it notes, “Any tax due is still required to be paid by the original due date of the return.”
DOR duly notes on its website that all of its walk-in centers are closed under the governor’s orders, and clearly it’s working under the same restrictions as most other offices, public and private.
“DOR is aware that the IRS has issued guidance with respect to tax returns and payments due April 15th,” it notes. “We are working on a plan to provide relief with respect to Massachusetts returns and payments.”
This really isn’t a difficult decision. The easiest solution is the simplest: Follow the IRS guidelines, as at least 16 other states already have, and do it quickly, to give Massachusetts taxpayers at least a little relief at this difficult time.
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