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California COVID-19 Sales Tax Extension

o California taxpayers can claim a sales tax extension, but must go online to claim it

o The extension allows sales tax filers to file and pay all taxes due between March 15, 2020 and June 15, 2020 by June 15, 2020 and receive no penalty

o Taxpayers can claim the extension even if the return they are filing is late (as long as it is no later than June 15, 2020)

California Sales and Use Tax Filing Time Extended

If your business has been affected by COVID-19, California is allowing extra time for businesses to file and pay applicable state taxes, including sale and use tax.

State tax filings (including sales tax) that are due from March 15, 2020 to June 15, 2020 are now all due on June 15, 2020.

This means that California sales and use tax filers have a 60 day extension on their time to file and pay sales tax.

The measure also provides some stress relief to California taxpayers who inadvertently find themselves filing and paying late. California allows you to request the extension even if you are already late with your filing/payment.

For California taxpayers to claim the extension, because the California sales and use tax extension is not automatic, it can be claimed at the time of filing, even if that filing is late.

To claim the extension, follow the California e-filing software’s instructions to enter disaster information, are the followin steps:

1. Login to the Taxpayer Online Services Portal

2. Under the “I Want” column, select “More“

3. Select “Submit a Relief Request“

4. Upon submission of your request, you will receive a confirmation number

5. To review submitted requests, log in with your Username/User ID and password, select your account and then select the Submissions tabFor more information, read the California FAQ sales tax extension here.

6. Further Reading

o California Sales Tax Guide for Businesses

o California’s Response to the Pandemic

o California Governors’s Executive Order

 

Tax Alerts
Tax Briefing(s)

President Donald Trump signed into law the bipartisan Paycheck Protection Program Flexibility Act of 2020 (P.L. 116-142) on June 5. The legislation aims to expand usability of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s ( P.L. 116-136) headliner small business loan program.


In consultation with Treasury Department, the Small Business Administration (SBA) has issued...


The IRS is postponing deadlines for certain time-sensitive actions due to the Coronavirus Disease 2019 (COVID-19) emergency. This relief affects employment taxes, employee benefit plans, exempt organizations, individual retirement arrangements (IRAs), Coverdell education savings accounts, health savings accounts (HSAs), and Archer and Medicare Advantage medical saving accounts (MSAs).


The IRS has issued guidance on coronavirus-related distributions and plan loans.


The IRS has released guidance that provides temporary administrative relief to help certain retirement plan participants or beneficiaries who need to make participant elections by allowing flexibility for remote signatures. Specifically, the guidance provides participants, beneficiaries, and administrators of qualified retirement plans and other tax-favored retirement arrangements with temporary relief from the physical presence requirement for any participant election (1) witnessed by a notary public in a state that permits remote notarization, or (2) witnessed by a plan representative using certain safeguards. The guidance accommodates local shutdowns and social distancing practices and is intended to facilitate the payment of coronavirus-related distributions and plan loans to qualified individuals, as permitted by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) ( P.L. 116-136).


The IRS has released a revenue procedure that describes temporary safe harbors for the purpose of determining the federal tax status of certain arrangements that hold real property as trusts in response to the COVID-19 emergency. Specifically, the Service has provided temporary relief to arrangements that are treated as trusts under Reg. §301.7701-4(c) which are, or have tenants who are, experiencing financial hardship as a result of COVID-19, to allow them to make certain modifications to their mortgages loans and their lease agreements, and to accept additional cash contributions without jeopardizing their tax status as grantor trusts. This revenue procedure also indicates that a cash contribution from one or more new trust interest holders to acquire a trust interest or a non-pro rata cash contribution from one or more current trust interest holders must be treated as a purchase and sale under Code Sec. 1001 of a portion of each non-contributing (or lesser contributing) trust interest holder’s proportionate interest in the trust’s assets.


The IRS has announced various extensions of deadlines for qualified opportunity funds and their investors due to the Coronavirus pandemic.


The IRS has issued proposed regulations clarifying the definition of a qualifying relative for various tax benefits for tax years 2018 through 2025 in which the dependent exemption amount is zero. During these years, the exemption amount will be inflation adjusted as provided in annual IRS guidance in determining whether an individual is a qualifying relative such as for head of household filing status and $500 child tax credit.


Proposed regulations provide guidance regarding the elimination of the deduction for expenses related to qualified transportation fringe benefits (QTFs) provided to an employee. The Tax Cuts and Jobs Act (P.L. 115-97) eliminated the deduction, effective for amounts paid or incurred after December 31, 2017.


Proposed regulations would define expenditures for direct primary care arrangements and health care sharing ministry memberships as amounts paid for medical care. Thus, amounts paid for those arrangements may be deductible medical expenses. The proposed regulations also clarify that amounts paid for certain arrangements and programs, such as health maintenance organizations (HMO) and certain government-sponsored health care programs, are amounts paid for medical insurance.


Proposed reliance regulations clarify the definitions of "real property" that qualifies for a like-kind exchange, including incidental personal property. Under the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97), like-kind exchanges occurring after 2017 are limited to real property used in a trade or business or for investment. Comments are requested.