(c) Dick Dubroff Final Focus Photography

Cover & Rossiter Receives Coveted Marvin S. Gilman Superstars in Business Award

Cover & Rossiter is excited to announce they have been awarded The Marvin S. Gilman Superstars in Business Award presented by the Delaware State Chamber of Commerce. The award honors businesses and nonprofit organizations for their achievements and model approaches to business and management.

Marie Holliday Recognized as Board Member of the Year

We are pleased to announce that Marie Holliday, Managing Director at Cover & Rossiter, has been recognized by the Delaware State Chamber of Commerce as Board Member of the Year. This year, the Commerce staff chose Marie as the honoree for her leadership, guidance, and volunteer time towards the Superstars in Business awards program.

Marie went above and beyond as a Board of Governors member and volunteer in 2020. We are grateful for her time and support. We also look forward to her taking on a larger role in our organization by joining the Board of Directors in 2021.

Michael J. Quaranta, president of the Delaware State Chamber of Commerce
Marie Holliday and Michael Quaranta holding the “Board Member of the Year” award.

Marie joined Cover & Rossiter in 1997. Appointed Managing Director in 2016, she is responsible for the strategic direction of the firm as well as leading the firm’s tax and advisory services departments. She has guided the firm’s expansion and growth in business segments such as captive insurance, trusts, and the firm’s advisory service line called Growth Management Consulting (GMC), a one-stop solution for developing sustainable growth strategies that help clients address the full range of challenges they face every day.

During her tenure as Managing Director, Cover & Rossiter was a 2018 recipient of the Marvin S. Gilman Superstars in Business award which honors businesses and nonprofits for their outstanding achievements and model approaches to business and management. 

The mission of the Delaware State Chamber of Commerce is to promote an economic climate that enables businesses of all sizes and types to become more competitive in a constantly changing, increasingly global, and unpredictable environment. Through programs, legislative advocacy, communications and publications, small-business benefits and services, and special networking events, the Chamber is continually providing an enriched environment for businesses and communities to grow. The Chamber provides unequaled service to the community of Delaware – one day and one business at a time.

Congratulations, Marie!

Cover & Rossiter Insights: 2020 Year-End Tax Planning

Click here to view the 2020 Year-End Tax Planning Newsletter

Cover & Rossiter Insights: Fall 2020 Newsletter

Click here to view the Fall 2020 Newsletter

Cover & Rossiter Announces New Hires

We are pleased to welcome Gabrielle Barrale, Sean Cullen, Deirdre Mohn, Alfredo Muniz, Jason Shuman, and Joanne Stosic to the team.

“We are beyond thrilled to welcome this talented group of professionals to the Cover & Rossiter team. Each brings technical skills and experience that allows us to continue to provide best-in-class service to our clients.”

Marie Holliday, Managing Director

Sean Cullen and Alfredo Muniz joined Cover & Rossiter in May as staff accountants in the audit department. Cullen began his public accounting career at CPA firms in Boston and central Massachusetts, where he worked in the planning, compliance, and audit areas for non-profit clients. Cullen graduated from Fordham University cum laude with a Bachelor’s degree in Public Accounting. He served as Director of Football Operations at Colgate University in the fall of 2018, helping the program to a Patriot League Championship and the NCAA FCS Quarterfinals.

Prior to joining the firm, Muniz worked as an income auditor and bank teller. He graduated from the University of Delaware in May 2018 with a Bachelor’s degree in Accounting and Finance. At UD, Muniz was an active member of Campus Alliance de la Raza (CALR), serving as president for one year and treasurer for two years. CALR is an on-campus organization whose purpose is to promote diversity in the university and in the community.

Jason Shuman joined Cover & Rossiter in January as a staff accountant in the tax department, while completing his education. He is a senior at West Chester University and is scheduled to graduate in 2021 with degrees in Accounting and White Collar Crime. Prior to joining Cover & Rossiter, Shuman worked in store management with Giant Food Stores.

Joanne Stosic joined the diversified accounting services team in January. Previously, she worked for a CPA firm in Paoli, PA, and in the financial reporting departments at both QVC and Corporation Service Company. She spent 12 years working as an accountant for a small business. Stosic received her Bachelor’s degree in Accounting from St. Joseph’s University in Pennsylvania.

Barrale and Mohn joined the administrative team in December 2019 and June 2020, respectively. Prior to joining Cover & Rossiter, Barrale worked and studied at Regent University in Virginia. Mohn brings 8 years of administrative experience in the tax and accounting field, having worked for Stephano Slack prior to joining Cover & Rossiter. She received her Bachelor of Arts degree in Television/Film from DeSales University in 2010.

C&R new hires 2020
L to R; Sean Cullen, Alfredo Muniz, Joanne Stosic, Gabrielle Barrale, Deirdre Mohn

Cover & Rossiter Welcomes Kevin Guy, CPA

Cover & Rossiter is pleased to welcome Kevin Guy, CPA to the firm as a Manager in the Audit Department.

Kevin Guy, CPA

Kevin has over 16 years of experience in public accounting, working for regional audit firms in Philadelphia and with PricewaterhouseCoopers. His audit background includes a strong focus on serving clients in the insurance industry along with experience in other for profit and not-for-profit sectors.

Kevin received his Bachelor’s degree in Accounting from the University of the West Indies, Jamaica. He is a member of the AICPA and the Pennsylvania Institute of CPAs.

“We’re excited to have Kevin join our team. His knowledge and expertise, especially within the insurance industry, will be a tremendous asset to our captive insurance clients.”

Eric Williams, Director Captive Audits

Kevin and his wife live in Downingtown, PA with their two sons. They like spending time together and traveling.

Myunghee Geerts Promoted to Director

Cover & Rossiter, P.A. is pleased to announce that Myunghee Geerts, CPA, MBA was promoted to Director on July 1st. Recognizing her contributions to our clients and the firm, Marie Holliday had this to say:

“In the short time Myunghee has been with us, she has become a highly valued and integral part of our firm’s present and future success.”

Marie Holliday, Managing Director, Cover & Rossiter
Myunghee Geerts, Director

Myunghee joined Cover & Rossiter in December 2018 as a Principal in the Tax Department. She is passionate about helping businesses prosper. She enjoys the process of learning complicated tax provisions and navigating ways to help her clients. Growing up, she observed firsthand what it takes to operate a small business, as her dad was an entrepreneur. This entrepreneurial spirit has led Myunghee to launch a new advisory service line at Cover & Rossiter called Growth Management Consulting, a one-stop solution for developing sustainable growth strategies that help clients address the full range of challenges they face every day.

Her previous work experiences at Big 4 accounting firms broadened her perspective of business operations and helped her understand key factors for business success. She frequently speaks at workshops and contributes articles to share this knowledge and thus help businesses in Delaware to succeed. She also provides advice on new tax legislation, such as the R&D Tax Credit and Delaware Angel Investment Tax Credit.

Over the years, Myunghee has served in many leadership roles in Delaware. Currently, she sits on the boards of the Delaware BioScience Association and the Delaware Korean American Association. In years past, she served on the boards of the Delaware Society of CPAs and the Delaware Symphony Orchestra. She was also a member of the Council of the American Institute of Certified Public Accountants.

“Myunghee is a tremendous asset to the business community in Delaware. She’s an excellent tax accountant and has invested significant time building her expertise on Delaware’s R&D tax credit. She has provided seminars to educate leaders in science and technology companies on how to best utilize the tax credit to maximize their businesses.”

Helen Stimson, Chief Operating Officer of Adesis

Myunghee earned a Bachelor’s degree in Accounting from Michigan State University and a Masters of Business Administration degree from the University of Delaware. She is a Certified Public Accountant in Delaware and Pennsylvania.

Please join us in congratulating Myunghee on her well-deserved promotion!

Roseman Selected to Attend AICPA’s 2020 Leadership Academy

Cover & Rossiter is pleased to announce that Luci Roseman is one of only 30 CPAs honored by the American Institute of CPAs (AICPA) as a member of the Leadership Academy’s 12th graduating class. Roseman was selected based on her exceptional leadership skills and professional experience for the four-day Leadership Academy program, which will be held October 5-8.

Roseman is a manager in the Tax Department of Cover & Rossiter. Since joining the firm in 2011, she has used her keen attention to detail to help clients navigate the ever-changing tax laws. Additionally, she is involved in staff recruitment and serves as the lead in developing new staff training.

She earned her undergraduate degree in Accounting from the University of Delaware, where she graduated Summa Cum Laude and at the top of her class. She is a member of the AICPA, Delaware Society of CPAs, Wilmington Tax Group, and Toastmasters International.

The AICPA Leadership Academy was designed to strengthen and expand the leadership skills of promising young professionals while they network with a peer group of talented and motivated CPAs.

The Leadership Academy features career-development workshops and sessions with some of the accounting profession’s most prominent influencers, including Tracey Golden, CPA, CGMA, chairman of the American Institute of CPAs and Barry Melancon, CPA, CGMA, American Institute of CPAs president and CEO, Association of Certified Professional Accountants CEO.

Participants were selected from public accounting firms of all sizes, business and industry, academia and consulting firms.

The 2020 Leadership Academy attendees were recommended by their employers, state CPA societies and/or volunteer organizations. Candidates submitted resumes and a statement explaining how participating in the Leadership Academy would impact them personally and professionally. They also wrote an essay on the topic “The future will bring significant changes to the accounting profession. What do leaders have to get right in order to successfully lead?”

To date, more than 385 CPAs have participated in the AICPA Leadership Academy, many of whom have gone on to take on leadership positions in their firms, businesses and volunteer organizations.

For more information about the AICPA Leadership Academy, visit AICPA.org/Leadership.

What You Need to Know About the CARES Act

Letter to clients regarding the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020.

** CLICK HERE to read a SUMMARY of the key points in the CARES Act **

Dear Client:

We hope that you are keeping yourself, your loved ones, and your community safe from COVID-19 (commonly referred to as the Coronavirus). Along with those paramount health concerns, you may be wondering about some of the recent tax changes meant to help everyone coping with the Coronavirus fallout. In addition to the summary of IRS actions and earlier-enacted federal tax legislation that we previously sent you, we now want to update you on the tax-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress’s gigantic economic stimulus package that the President signed into law on March 27, 2020.

Recovery rebates for individuals:

To help individuals stay afloat during this time of economic uncertainty, the government will send up to $1,200 payments to eligible taxpayers and $2,400 for married couples filing joints returns. An additional $500 additional payment will be sent to taxpayers for each qualifying child dependent under age 17 (using the qualification rules under the Child Tax Credit).

Rebates are gradually phased out, at a rate of 5% of the individual’s adjusted gross income over $75,000 (singles or marrieds filing separately), $112,500 (head of household), and $150,000 (joint). There is no income floor or ”phase-in”-all recipients who are under the phaseout threshold will receive the same amounts. Tax filers must have provided, on the relevant tax returns or other documents (see below), Social Security Numbers (SSNs) for each family member for whom a rebate is claimed. Adoption taxpayer identification numbers will be accepted for adopted children. SSNs are not required for spouses of active military members. The rebates are not available to nonresident aliens, to estates and trusts, or to individuals who themselves could be claimed as dependents.

The rebates will be paid out in the form of checks or direct deposits. Most individuals won’t have to take any action to receive a rebate. IRS will compute the rebate based on a taxpayer’s tax year 2019 return (or tax year 2018, if no 2019 return has yet been filed). If no 2018 return has been filed, IRS will use information for 2019 provided in Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Social Security Equivalent Benefit Statement.

Rebates are payable whether or not tax is owed:

Thus, individuals who had little or no income, such as those who filed returns simply to claim the refundable earned income credit or child tax credit, qualify for a rebate.

Waiver of 10% early distribution penalty:

The additional 10% tax on early distributions from IRAs and defined contribution plans (such as 401(k) plans) is waived for distributions made between January 1 and December 31, 2020 by a person who (or whose family) is infected with the Coronavirus or who is economically harmed by the Coronavirus (a qualified individual). Penalty-free distributions are limited to $100,000, and may, subject to guidelines, be re-contributed to the plan or IRA. Income arising from the distributions is spread out over three years unless the employee elects to turn down the spread out. Employers may amend defined contribution plans to provide for these distributions. Additionally, defined contribution plans are permitted additional flexibility in the amount and repayment terms of loans to employees who are qualified individuals.

Waiver of required distribution rules:

Required minimum distributions that otherwise would have to be made in 2020 from defined contribution plans (such as 401(k) plans) and IRAs are waived. This includes distributions that would have been required by April 1, 2020, due to the account owner’s having turned age 70 1/2 in 2019.

** CLICK HERE to read a SUMMARY of the key points in the CARES Act **

Charitable deduction liberalizations:

The CARES Act makes four significant liberalizations to the rules governing charitable deductions:

(1) Individuals will be able to claim a $300 above-the-line deduction for cash contributions made, generally, to public charities in 2020. This rule effectively allows a limited charitable deduction to taxpayers claiming the standard deduction.

(2) The limitation on charitable deductions for individuals that is generally 60% of modified adjusted gross income (the contribution base) doesn’t apply to cash contributions made, generally, to public charities in 2020 (qualifying contributions). Instead, an individual’s qualifying contributions, reduced by other contributions, can be as much as 100% of the contribution base. No connection between the contributions and COVID-19 activities is required.

(3) Similarly, the limitation on charitable deductions for corporations that is generally 10% of (modified) taxable income doesn’t apply to qualifying contributions made in 2020. Instead, a corporation’s qualifying contributions, reduced by other contributions, can be as much as 25% of (modified) taxable income. No connection between the contributions and COVID-19 activities is required. 

(4) For contributions of food inventory made in 2020, the deduction limitation increases from 15% to 25% of taxable income for C corporations and, for other taxpayers, from 15% to 25% of the net aggregate income from all businesses from which the contributions were made.

Exclusion for employer payments of student loans:

An employee currently may exclude $5,250 from income for benefits from an employer-sponsored educational assistance program. The CARES Act expands the definition of expenses qualifying for the exclusion to include employer payments of student loan debt made before January 1, 2021. 

Break for remote care services provided by high deductible health plans:

For plan years beginning before 2021, the CARES Act allows high deductible health plans to pay for expenses for tele-health and other remote services without regard to the deductible amount for the plan.

Break for nonprescription medical products:

For amounts paid after December 31, 2019, the CARES Act allows amounts paid from Health Savings Accounts and Archer Medical Savings Accounts to be treated as paid for medical care even if they aren’t paid under a prescription. And, amounts paid for menstrual care products are treated as amounts paid for medical care. For reimbursements after December 31, 2019, the same rules apply to Flexible Spending Arrangements and Health Reimbursement Arrangements.

** CLICK HERE to read a SUMMARY of the key points in the CARES Act **

Business only provisions 

Employee retention credit for employers:

Eligible employers can qualify for a refundable credit against, generally, the employer’s 6.2% portion of the Social Security (OASDI) payroll tax (or against the Railroad Retirement tax) for 50% of certain wages (below) paid to employees during the COVID-19 crisis. 

The credit is available to employers carrying on business during 2020, including non-profits (but not government entities), whose operations for a calendar quarter have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also available to employers who have experienced a more than 50% reduction in quarterly receipts, measured on a year-over-year basis relative to the corresponding 2019 quarter, with the eligible quarters continuing until the quarter after there is a quarter in which receipts are greater than 80% of the receipts for the corresponding 2019 quarter.

For employers with more than 100 employees in 2019, the eligible wages are wages of employees who aren’t providing services because of the business suspension or reduction in gross receipts described above.

For employers with 100 or fewer full-time employees in 2019, all employee wages are eligible, even if employees haven’t been prevented from providing services. The credit is provided for wages and compensation, including health benefits, and is provided for the first $10,000 in eligible wages and compensation paid by the employer to an employee. Thus, the credit is a maximum $5,000 per employee. 

Wages don’t include (1) wages taken into account for purposes of the payroll credits provided by the earlier Families First Coronavirus Response Act for required paid sick leave or required paid family leave, (2) wages taken into account for the employer income tax credit for paid family and medical leave (under Code Sec. 45S ) or (3) wages in a period in which an employer is allowed for an employee a work opportunity credit (under Code Sec. 51 ). An employer can elect to not have the credit apply on a quarter-by-quarter basis. 

The IRS has authority to advance payments to eligible employers and to waive penalties for employers who do not deposit applicable payroll taxes in reasonable anticipation of receiving the credit. The credit is not available to employers receiving Small Business Interruption Loans. The credit is provided for wages paid after March 12, 2020 through December 31, 2020.

Delayed payment of employer payroll taxes:

Taxpayers (including self-employeds) will be able to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. Taxes that can be deferred include the 6.2% employer portion of the Social Security (OASDI) payroll tax and the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer 6.2% Social Security (OASDI) rate). The relief isn’t available if the taxpayer has had debt forgiveness under the CARES Act for certain loans under the Small Business Act as modified by the CARES Act (see below). For self-employeds, the deferral applies to 50% of the Self-Employment Contributions Act tax liability (including any related estimated tax liability).

Net operating loss liberalizations:

The 2017 Tax Cuts and Jobs Act (the 2017 Tax Law) limited NOLs arising after 2017 to 80% of taxable income and eliminated the ability to carry NOLs back to prior tax years. For NOLs arising in tax years beginning before 2021, the CARES Act allows taxpayers to carryback 100% of NOLs to the prior five tax years, effectively delaying for carrybacks the 80% taxable income limitation and carryback prohibition until 2021.

The Act also temporarily liberalizes the treatment of NOL carryforwards. For tax years beginning before 2021, taxpayers can take an NOL deduction equal to 100% of taxable income (rather than the present 80% limit). For tax years beginning after 2021, taxpayers will be eligible for: (1) a 100% deduction of NOLs arising in tax years before 2018, and (2) a deduction limited to 80% of taxable income for NOLs arising in tax years after 2017.

The provision also includes special rules for REITS, life insurance companies, and the Code Sec. 965 transition tax. There are also technical corrections to the 2017 Tax Law effective dates for NOL changes.

Deferral of non-corporate taxpayer loss limits:

The CARES Act retroactively turns off the excess active business loss limitation rule of the TCJA in Code Sec. 461(l) by deferring its effective date to tax years beginning after December 31, 2020 (rather than December 31, 2017). (Under the rule, active net business losses in excess of $250,000 ($500,000 for joint filers) are disallowed by the 2017 Tax Law and were treated as NOL carryforwards in the following tax year.)

The CARES Act clarifies, in a technical amendment that is retroactive, that an excess loss is treated as part of any net operating loss for the year, but isn’t automatically carried forward to the next year. Another technical amendment clarifies that excess business losses do not include any deduction under Code Sec. 172 (NOL deduction) or Code Sec. 199A (qualified business income deduction).

Still another technical amendment clarifies that business deductions and income don’t include any deductions, gross income or gain attributable to performing services as an employee. And because capital losses of non-corporations cannot offset ordinary income under the NOL rules, capital loss deductions are not taken into account in computing the Code Sec. 461(l) loss and the amount of capital gain taken into account cannot exceed the lesser of capital gain net income from a trade or business or capital gain net income.

Acceleration of corporate AMT liability credit:

The 2017 Tax Law repealed the corporate alternative minimum tax (AMT) and allowed corporations to claim outstanding AMT credits subject to certain limits for tax years before 2021, at which time any remaining AMT credit could be claimed as fully-refundable. The CARES Act allows corporations to claim 100% of AMT credits in 2019 as fully-refundable and further provides an election to accelerate the refund to 2018.

** CLICK HERE to read a SUMMARY of the key points in the CARES Act **

Relaxation of business interest deduction limit:

The 2017 Tax Law generally limited the amount of business interest allowed as a deduction to 30% of adjusted taxable income (ATI). The CARES Act generally allows businesses, unless they elect otherwise, to increase the interest limitation to 50% of ATI for 2019 and 2020, and to elect to use 2019 ATI in calculating their 2020 limitation. For partnerships, the 30% of ATI limit remains in place for 2019 but is 50% for 2020. However, unless a partner elects otherwise, 50% of any business interest allocated to a partner in 2019 is deductible in 2020 and not subject to the 50% (formerly 30%) ATI limitation. The remaining 50% of excess business interest from 2019 allocated to the partner is subject to the ATI limitations. Partnerships, like other businesses, may elect to use 2019 partnership ATI in calculating their 2020 limitation.

Technical correction to restore faster write-offs for interior building improvements:

The CARES Act makes a technical correction to the 2017 Tax Law that retroactively treats (1) a wide variety of interior, non-load-bearing building improvements (qualified improvement property (QIP)) as eligible for bonus deprecation (and hence a 100% write-off) or for treatment as 15-year MACRS property or (2) if required to be treated as alternative depreciation system property, as eligible for a write-off over 20 years. The correction of the error in the 2017 Tax Law restores the eligibility of QIP for bonus depreciation, and in giving QIP 15-year MACRS status, restores 15-year MACRS write-offs for many leasehold, restaurant and retail improvements.

Accelerated payment of credits for required paid sick leave and family leave:

The CARES Act authorizes IRS broadly to allow employers an accelerated benefit of the paid sick leave and paid family leave credits allowed by the Families First Coronavirus Response Act by, for example, not requiring deposits of payroll taxes in the amount of credits earned.

Pension funding delay:

The CARES Act gives single employer pension plan companies more time to meet their funding obligations by delaying the due date for any contribution otherwise due during 2020 until January 1, 2021. At that time, contributions due earlier will be due with interest. Also, a plan can treat its status for benefit restrictions as of December 31, 2019 as applying throughout 2020.

Certain SBA loan debt forgiveness isn’t taxable:

Amounts of Small Business Administration Section 7(a)(36) guaranteed loans that are forgiven under the CARES Act aren’t taxable as discharge of indebtedness income if the forgiven amounts are used for one of several permitted purposes. The loans have to be made during the period beginning on February 15, 2020 and ending on June 30, 2020.

Suspension of certain alcohol excise taxes:

The CARES Act suspends alcohol taxes on spirits withdrawn during 2020 from a bonded premises for use in or contained in hand sanitizer produced and distributed in a manner consistent with FDA guidance related to the outbreak of virus SARSCoV- 2 or COVID-19.

Suspension of certain aviation taxes:

The CARES Act suspends excise taxes on air transportation of persons and of property and on the excise tax imposed on kerosene used in commercial aviation. The suspension runs from March 28, 2020 to December 31, 2020. 

IRS information site:

Ongoing information on the IRS and tax legislation response to COVID- 19 can be found at https://www.irs.gov/coronavirus

Check back on Cover & Rossiter’s website frequently for updates on COVID-19 and the impact on tax returns.

Cover & Rossiter will be pleased to hear from you at any time with questions about the above information or any other matters, related to COVID-19 or not. Contact us at (302) 656-6632.

We wish all of you the very best in a difficult time. 
Marie Holliday, Managing Director Pete Kennedy, Director Loretta Manning, Director Jennifer Pacilli, Director Eric Williams, Director

** CLICK HERE to read a SUMMARY of the key points in the CARES Act **

COVID 19 Update: Digital Submission of Your Tax Documents

We strongly encourage you to submit your documents via one of our secure file submission platforms, TaxCaddy or Sharefile

TaxCaddy: TaxCaddy makes it easier than ever to gather your 1040 tax documents and share them with Cover & Rossiter. If you are a current C&R client, send an email to Intake@CoverRossiter.com and ask to be sent a link to enroll in TaxCaddy.

ShareFile: ShareFile is available for you to securely send all types of files (Excel, Word, PDF, QuickBooks, .jpeg, etc.). CLICK HERE for instructions on uploading your tax documents using ShareFile. Then, when you’re ready to send us your documents, CLICK HERE. For recipient, use Intake@CoverRossiter.com.

Questions about TaxCaddy or ShareFile? You can email us at Intake@CoverRossiter.com or call us at (302) 656-6632.

COVID 19 Update: Tax Filing/Payment Deadlines (Updated 4/10/20)

The Federal government has extended tax season, extension payments, and the 1st and 2nd quarter 2020 estimated tax payments to July 15, 2020 for Individual 1040, Fiduciary 1041, Corporate 1120, and 709 Gift tax returns. Each state will make a decision to adopt the Federal Extension Due Date. Many states are waiving penalties for late filing and underpayment penalties.

With this in mind, we have requested that our staff take measures to, first and foremost, protect themselves and their families. Many are working remotely and we have asked that they work a traditional work week schedule vs. working overtime as we normally would at that time of year.

What does this mean for your tax return? The likelihood that your return will be delivered to you by April 15th will depend upon the timing of when we received your tax materials. There will be more returns this year that will be delivered by July 15th or go on extension. Rest assured that this does not increase the likelihood of audit, isn’t a reflection on you as a taxpayer, and that the vast majority of taxpayers throughout the country will file by July 15th.

We encourage you to submit your tax documents rather than waiting. We are committed to processing returns as quickly as possible. Many of you are due a refund and we want to ensure that you receive it in a timely manner. Others may owe, but our goal is to file your return as soon as possible, which still allows you to delay your tax payment until the new deadline. Many unknowns are still ahead and we hope to avoid the temptation to “relax” due to an extended filing date.

Should I pay my taxes now or later? Since you have until July 15, 2020 to pay your taxes, we suggest that you wait to pay but to set aside funds to pay the taxes on or before July 15, 2020. There will be no penalties or interest for waiting until July 15, 2020.

What about the STATE returns? Each state will make a decision to adopt the Federal Extended Due Date. Many states are waiving penalties for late filing and underpayment. We will continue to monitor state guidance and update as it becomes available.

As of 4/2/20, according to the AICPA, all states with a personal income tax have extended their 4/15 due dates (38 with a 7/15 deadline, and 8 states with other deadlines – as detailed below).

  • 38 states (including DC) [AL, AR, AZ, CA, CO CT, DC, DE, GA, IL, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MT, NC, ND, NE, NJ, NM, NY, OH, OK, OR, PA, RI, SC, TN, UT, VT, WI, WV] and USVI have changed filing and payments deadline from 4/15/20 to 7/15/20.
  • 8 states [(IA (7/31), HI (7/20), ID (6/15), NH (6/15), MS (5/15), OR (4/30), VA (6/1), WA (6/15)] and Puerto Rico (6/15) have changed to other filing and payments deadline.

Here’s more detailed information as as it relates to states important to many of our clients:

  • DELAWARE – adopted Federal Extended Due Date. DE returns due on April 30, 2020 will now be due on July 15, 2020. Estimated tax payments due on April 30, 2020 are extended to July 15, 2020. Note that second quarter payments remain due on June 15, 2020. See DE Division of Revenue notice.
    • City of Wilmington – the due dates of all 2019 earned income tax returns as well as due date for payment is postponed to July 15, 2020, which shall be treated as the original due date of such returns. No interest or penalties will accrue for the period from April 15, 2020 through July 15, 2020. NOTE 1: There is no postponement for remittance of withholding taxes and filing of withholding tax returns. NOTE 2: For City nonresidents who have City withholding and file for wage tax refunds based on the portion of their wages earned outside the City, no change was needed because these returns are not “due” on April 15. According to the statute, a wage tax refund claim for 2019 is timely if it is filed by December 31, 2022.
  • CONNECTICUT – adopted Federal Extended Due Date. CT 1040 returns due on April 15, 2020 will now be due on July 15, 2020. Estimated tax payments due on April 30, 2020 and June 15, 2020 are extended to July 15, 2020. Corporate returns: Form CT-1065/CT-1120SI – Filing date extended to April 15, 2020; payment deadline extended to June 15, 2020. Form CT-1120 – Filing date and payment deadlines extended to June 15, 2020. Form CT-990T – filing date and payment deadlines extended to June 15, 2020. See the Department of Revenue Services notice.
  • MARYLAND – adopted Federal Extended Due Date. MD returns due on April 15, 2020 will now be due on July 15, 2020. Estimated tax payments due on April 30, 2020 are extended to July 15, 2020. Business-related tax returns AND payments that were not collected in March, April and May are due June 1, 2020. See Maryland due dates chart. NOTE: The extension for filing returns and payment of income tax does not affect the filing of estate tax returns or the payment of estate tax.
  • MASSACHUSETTS – MA moved the state personal income tax filing deadline to July 15, 2020, consistent with the federal government. See MA press release.
  • NEW JERSEYUPDATE 4/1: NJ individual and corporate returns due on April 15, 2020 are extended to July 15, 2020.
  • NEW YORK UPDATE 3/30: NY personal income, fiduciaries (estate and trusts), and corporation tax returns originally due on April 15, 2020, have been extended to July 15, 2020. In addition, all related tax payments due on April 15, 2020, may be deferred to July 15, 2020, without penalties and interest, regardless of amount owed. See NY Department of Taxation announcement and additional questions and answers.
  • PENNSYLVANIA – adopted Federal Extended Due Date. PA returns due on April 15, 2020 will now be due on July 15, 2020. Estimated tax payments due on April 30, 2020 and June 15, 2020 are extended to July 15, 2020. See PA Department of Revenue notice.
    • City of Philadelphia – filing and payments extended to July 15, 2020 for businesses for the Business Income and Receipts Tax and the Net Profits Tax. This policy includes estimated payments.
  • VIRGINIA – All income tax filing deadlines remain the same, including the May 1, 2020 individual income tax filing due date. However, Virginia already has an automatic, 6-month extension to file (7 months for certain corporations). Any income tax payments due during the time period of April 1, 2020 to June 1, 2020, will now be due on June 1, 2020. This includes individual and corporate income taxes paid to Virginia Tax. Visit VA website for the latest updates.

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