California Extends Payroll Tax Filings for Businesses Affected By COVID-19

 Posted on May 13, 2020 in Taxation Law

For the past few months, the coronavirus pandemic has affected states across the country. Some states with larger populations, such as California and New York, have experienced a much larger infected population and have consequently placed restrictions on businesses and individuals in an effort to slow the spread of the virus. Nonessential businesses were ordered to shut down brick-and-mortar operations and work from home, if possible. Even though not all businesses were affected equally by the pandemic, many businesses are still struggling to stay afloat during this time. In response to the struggles that many businesses are feeling, California Governor Gavin Newsom issued an executive order allowing businesses affected by COVID-19 to request an extension to file payroll reports and taxes to the state.

How Can I Receive an Extension for Filing?

Payroll taxes consist of four separate categories: unemployment insurance (UI), employment training tax (ETT), state disability insurance (SDI), and personal income tax (PIT). Normally, these taxes are filed and paid by an employer on a regular basis. SDI and PIT due dates depend on the employer’s federal deposit schedule and the amount of PIT that has been withheld. UI and ETT payments are due quarterly, or every three months.

Usually, an employer would face penalties for late filing, and the employer would be required to pay a penalty plus interest on late payments. However during a state of emergency, employers can request that the deadline for their payroll taxes be extended up to 60 days. California Governor Newsom stated in an executive order that businesses that have been directly affected by the COVID-19 pandemic can request this extension.

 To be granted the extension, employers must first file the report and payment electronically within 60 days of the past-due date. Then, employers must send a letter to the Employment Development Department (EDD) requesting the extension and noting the impact of COVID-19 on the business and citing Section 1111.5 of the California Unemployment Insurance Code (CUIC). As long as a request is received within 60 days of the past-due payment, the business will not be issued a penalty or be required to pay interest.

A San Jose, CA Employment Tax Attorney Can Answer Any Questions You Might Have

The effects of the COVID-19 pandemic have reached into nearly every area of our lives, and many people have been affected on both a personal and professional level. If your business has been impacted by the coronavirus pandemic, you should speak with a San Jose payroll tax lawyer. At John D. Teter Law Offices, we can help you understand the options you have when dealing with issues such as payroll taxes. Our knowledgeable attorney can help you make sure you avoid penalties for late filings. Call our office today at 408-866-1810 to schedule a consultation. 

Sources:

https://edd.ca.gov/pdf_pub_ctr/de231sed.pdf

https://edd.ca.gov/about_edd/coronavirus-2019/employers.htm