Update: This piece is from March 20th. As of April 1, all states with individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. es have made changes to taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. filing and/or payment deadlines, with all but Idaho, Mississippi, and Virginia postponing both filing and payment obligations until July 15th, in line with the federal government. See our state tracker for more.
This morning, the federal government moved tax day from April 15 to July 15 in response to the coronavirus pandemic, granting more time for both filing and payment. But for many taxpayers, it might not matter much if states don’t follow suit. And right now, only a few have done so.
Unfortunately, most states are currently on track to require that tax returns be filed by April 15. States which do not extend their own filing deadlines to July 15 will negate much of the benefit of the federal extension, because taxpayers would still have to prepare much of the relevant tax information—a great deal of it drawn from their federal 1040s—by the earlier date.
Although most states follow the normal federal April 15 date as the deadline for annual filers, this tends to be a statutory date, not a direct linkage with the federal government’s deadline. Even with the federal filing deadline delayed, states will still require filers to submit their returns by April 15—unless policymakers act, because the new federal extension falls after every state’s regular filing deadline.
Of the 43 states with an income tax, all but five have an April 15 filing deadline. Hawaii uses April 22, Delaware and Iowa have an April 30 filing deadline, Virginia gives taxpayers until May 1, and in Louisiana, taxes are not due until May 15. In Oklahoma, the regular filing deadline is April 15, as for most states, but those filing electronically have until April 20 to do so.
Several states have already announced revised filing guidance given the coronavirus crisis, but most have not. To the extent that states have the flexibility to avoid automatic budget reductions should collections be pushed into the next fiscal year, they should try to follow the federal government’s July 15th deadline. The following table summarizes adjustments to date.
|Alabama||Follow IRS||✓||✓||Based on statement by revenue department; no details yet|
|California||July 15||✓||✓||Applies to all individual and business tax returns; payroll tax extensions available|
|Connecticut||Follow IRS||✓||✓||Will follow IRS for individual returns; business returns postponed to June 15|
|Indiana||July 15||✓||✓||Applies to PIT and CIT, with similar postponement of estimated payments|
|Iowa||July 31||✓||✓||Applies to PIT as well as CIT, franchise, and other business taxes|
|Maryland||July 15||✓||Payment extension only; taxpayers are still required to file by April 15|
|New Mexico||July 15||✓||✓||Applies to individual and corporate income tax returns|
|Oklahoma||July 15||✓||Payment extension only (defer up to $10M); filing still by April 15|
|Oregon||Follow IRS||✓||✓||Applies to PIT only, but interest and penalties can be waived on CAT|
|South Carolina||June 1||✓||✓||Applies to all tax payments previously due in April or May|
|Utah||Follow IRS||✓||✓||Utah already administratively follows the federal government|
|Virginia||June 1||✓||Payment (but not filing) deadline moved from May 1 to June 1|
Sources: Tax Foundation research; state tax departments; news reports.
Revenue officials in other states have indicated they are monitoring the situation and may act soon, and many states have already announced additional flexibility for businesses and individuals who owe other taxes with imminent filing deadlines. Although tax deadlines tend to be statutory, revenue departments or governors are frequently empowered to postpone them, particularly when an emergency declaration is in place. In some states, however, legislative action may prove necessary to provide taxpayers with deadline relief.
Now that the federal decision is known, states should take immediate steps to postpone — to July 15, if possible — avoiding a burden to their own taxpayers that the federal extension was intended to relieve.
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