In light of the COVID-19 pandemic, states continue to offer tax return filing and payment deferrals as well as other assistance measures, including employee retention and loan/financial assistance programs.
Below highlights Pennsylvania’s efforts. To learn more about relief efforts identified in other states in which our firm is located, review Cohen & Company’s easy-to-use spreadsheet tracker for more detail.
Pennsylvania Relief Assistance
Pennsylvania House Bill (HB) 1232 allows individuals and businesses to defer tax filings and certain payments related to the 2019 and 2020 tax years. Pennsylvania is providing guidance on procedural changes to the tax appeal system. In addition, the state is offering financial assistance programs and job retention incentives.
Pennsylvania Income Tax Filing and Payments Deferred
Relief: Pennsylvania is deferring the income tax deadline for individuals, S Corporations, partnerships, trusts and estates to July 15, 2020, similar to the federal extension of approximately three months from the original deadline of April 15, 2020. Pennsylvania is deferring the income tax deadline for C corporations, with returns originally due between April 15 and July 15, to August 15. As with the IRS extension, Pennsylvania will waive interest and penalty on tax payments incurred as a result of the extension.
The 2020 first and second quarterly payments for individual taxpayers, normally scheduled for April 15 and June 15, have also been extended to July 15, 2020. The second quarter estimated payment deadline for C Corporations remains June 15.
Who this Impacts: All individuals, trusts, estates, C Corporations, partnerships and S Corporations are eligible if they file Pennsylvania income tax.
Income Tax Filing and Payments Deferred
Relief: HB 1232 directed local municipalities to extend the filing deadline for the individual local earned income tax to July 15, 2020. Interest and penalty on tax payments incurred as a result of the extension will also be waived.
The City of Philadelphia deferred the tax deadline for the Business Income & Receipts Tax (BIRT) and Net Profits Tax (NPT) to July 15. The deferment also includes estimated payments for BIRT and NPT originally due between April 15 and July 15.
Who this Impacts: All individuals and businesses are eligible.
Tax Appeal Procedural Changes
Relief: The Pennsylvania Board of Appeals (BOA) and Board of Finance & Revenue (BF&R) have suspended in-person hearings but will continue operations in a limited capacity under the revised guidelines. BOA hearings will be conducted through Skype. Taxpayers that do not have the ability to use Skype may waive the formal hearing and request an informal conference call to discuss the case, request a continuance of the hearing as well as an extension of the decision deadline, or waive the hearing and request that the decision be based on the record. BOA will continue to accept new appeals and strongly encourages taxpayers to file all appeals using the online petition center. BOA petitions will be considered to be timely filed if filed by the later of the following dates: 30 days after the reopening of the BOA offices or the original appeal deadline.
Appeal deadline dates that fell prior to the office closure on March 16, 2020 have NOT been extended.
BF&R hearings will be held via phone. Petitioners may waive their right to an oral hearing and request BF&R decide the appeal based on the submissions. Petitioners may also request a continuance to a future hearing date. BF&R continues to accept new tax appeals; however, the BF&R has not currently extended the deadlines to file appeals.
Who this Impacts: Pennsylvania taxpayers with open tax appeals.
Shared Work Pennsylvania
Benefit: The Shared Work Pennsylvania program provides an alternative to layoffs for employers. Pennsylvania’s program allows employers to temporarily reduce the work hours of a group of employees by 20 to 40% and divide the remaining hours of the affected unit. This allows employers to retain employees, minimize training costs and quicker ramp up time for operations as business needs increase. Employees covered by a Shared Work plan may be eligible to receive unemployment compensation benefits.
Who this Impacts: All Pennsylvania employers looking to retain employees while under economic stress.
COVID-19 Working Capital Access (CWCA)
Relief: The COVID-19 Working Capital Access (CWCA) Program provides small businesses with loans up to $100,000 to be used for operation expenses, excluding fixed assets and production machinery and equipment. Under the program loans will have terms of three years, with a 12-year amortization. No payments will be due in the first year. Starting with year two, principal and any applicable interest payments will be due monthly. At the end of year three, employers must pay a balloon payment. For most small businesses the interest rate will be 0%.
** As of the writing of this update, applications for the CWCA program are no longer being accepted. However, legislative action may occur to provide additional funding and reopen the program.
Who this Impacts: Small for-profit businesses located in Pennsylvania with 100 or fewer employees worldwide at the time of application submission.
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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.