On the evening of June 11, 2020, the New York State Department of Taxation and Finance (“Tax Department”) unexpectedly issued Notice N-20-8, Announcement Regarding June Estimated Tax Payments, indicating that the due date for estimated tax payments due on June 15, 2020, for personal income, fiduciary and corporate taxpayers remains in place. Taxpayers should now consider the estimated tax payment due on June 15, 2020, as the first installment payment towards the 2020 tax year, and the estimated tax payment due on July 15, 2020, as the second installment payment for 2020.
Prior to the issuance of this notice, the Tax Department had not given any indication or warning, that they expected estimate tax payments to be paid on the June 15, 2020 due date.
Issuing this notice just four days before the June 15, 2020 estimated tax payment due date, has blindsided many taxpayers and tax professionals, who were relying on prior guidance issued by the Tax Department in March, indicating that:
“2019 returns due on April 15, 2020, and related payments of tax or installments of tax, including installments of estimated taxes for the 2020 tax year, will not be subject to any failure to file, failure to pay, late payment, or underpayment penalties, or interest if filed and paid by July 15, 2020.” [N-20-2, Announcement Regarding Relief from Certain Filing and Payment Deadlines due to the Novel Coronavirus, COVID-19, March 2020]
It was widely thought that this statement meant that both the first and second quarter installments of estimated taxes for the 2020 tax year were not due until July 15, 2020. The Tax Department has not made any attempt to clarify this statement prior to yesterday. In addition, the State Budget Director, Robert Mujica, was quoted on March 20, during one of Governor Cuomo’s press conferences, stating, “the (state) deadline is the federal deadline. We are tied to the federal deadline so our deadline will move to the end of July.” Unfortunately, it appears that the Tax Department is no longer taking this position with regards to estimated tax payments.
While the risk is potentially limited to one month of interest charges, taxpayers should contact their tax advisor for additional guidance as they will need to quickly consider the timing and amount of their estimated tax payment due on June 15, given the limited notice the Tax Department has provided.
Please contact your Tronconi Segarra & Associates tax advisor for more information on this or any tax matter. If you do not have a Tronconi Segarra & Associates tax advisor, please call 716.633.1373 or Contact Us through our website with your question.
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