Federal and Virginia Tax Updates in Response to Coronavirus

Federal and Virginia Tax Updates in Response to Coronavirus

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Updates on Confirmed and Pending Tax Changes in Response to Coronavirus

We are closely monitoring this evolving and unique economic situation. We will keep you updated and informed on how to respond to tax and regulation changes as they are announced. If you have questions about how these changes impact your unique individual or business tax situation, please contact your Keiter advisor. We are here to listen and provide sound advice.

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1. U.S. Treasury Postpones Federal Tax Filing Deadline

March 20, 2020, The Treasury announced a change to tax filing deadlines.

  • The April 15 deadline for filing tax returns will now be postponed until July 15, 2020, according to Treasury Secretary Steven Mnuchin. The change comes amid a wave of criticism that the previous guidance of just extending the deadline for making tax payments was insufficient and unnecessarily confusing to taxpayers. Stay updated on additional changes by visiting the IRS website.

2. VIRGINIA STATE TAX CHANGES

On March 19, 2020, Governor Northam announced tax changes to assist Virginia residents and businesses in response to the economic downturn resulting from the Coronavirus.

SALES TAX PAYMENTS

  • February sales tax payments that are due today, March 20, 2020, may be deferred until April 20, 2020. Note-A request must be filed with the Department of Taxation (as provided in Tax Bulletin 20-3) to defer the filing of the return and payment of tax due. We understand the Tax Department plans to be liberal in granting the deferments.
  • While penalties will be waived if the deferral is granted, businesses will be charged interest on the late payments. However, this may change. The General Assembly must approve the waiver of interest as it is mandated by law, and the issue will likely be addressed when the General Assembly reconvenes for the Veto Session on April 22.

INCOME TAX PAYMENTS

  • Virginia residents and businesses are allowed to delay payment of their 2019 income taxes until June 1, 2020. Note-The filing deadline remains as May 1, 2020.
  • Interest will be charged but no late payment penalty will be assessed on late payments. This may change if approved by the General Assembly.

Read all of the Governor’s Announcements.


3. Henrico County

  • Hotels and restaurants may push back the payment of the hotel tax and meals tax without penalty or interest to June 22, 2020. Note-This relief effort will be re-evaluated and could possibly be re-enacted to extend the tax payment to a further date.

4. City of Richmond

  • Mayor Levar Stoney will introduce a tax amnesty ordinance on March 23, 2020, that will be considered by City Council at a subsequent meeting. That ordinance, if approved by Council without amendment, would allow for the waiver of penalty and interest for meals, admission, and transient occupancy taxes for approved program participants for taxes otherwise due on March 20, 2020, and some subsequent months. The next City Council meeting is currently scheduled for April 13, 2020.

We will continue to share tax and other regulation changes as they become available. Stay current on COVID-19 related tax and accounting updates.


About the Author

Keiter CPAs is a certified public accounting firm serving the audittax, accounting and consulting needs of businesses and their owners located in Richmond and across Virginia. We focus on serving emerging growth businesses and companies in the financial servicesconstructionreal estatemanufacturingretail & distribution industries and nonprofits. We also provide business valuations and forensic accounting servicesfamily office services, and inbound international services.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.

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