As part of its overall response to COVID-19, the IRS put certain measures into place which provided some tax relief, such as extensions and tax credits for small to mid-sized businesses. However, the due dates for corporate, sales and payroll taxes have some business owners confused. If you are one them, following are some things you should know.
While Payroll Taxes (Form 941) and NYS-45 are due quarterly (for instance Jan. 1-March 31 is due in April), the quarterly payments for Sales Taxes are different in New York. Q1 of any year runs from March to May, payable in June for quarterly filers. To confuse things even more, there are three different types of Sales Tax filings in NY – depending on the amount of revenue generated over a given period of time, a business can file either monthly, quarterly, and annually.
Corporate Taxes are due on the 15th day of the 3rd month following the corporation year-end date. For example, if the corporation’s year-end date is June 30th, then their Corporate Tax due date would be September 15th.
In 2020, we have the added complications of COVID, which for many businesses has been nothing short of a fiasco, trying to keep track of the Grants, Credits, and Deferrals. We all need some sanity in this world of confusion to keep our businesses healthy as well as ourselves.
Let us simplify your tax obligations and payments. Employer Tax Returns (ER) for 2020, Q1 & Q2, are now overdue. However, you can defer the deposit and payment of the ER’s share of Social Security taxes and certain railroad retirement taxes. The current deferral period is from 3/27/20 to 12/31/20, and may be deferred until the applicable dates. It is the employer’s responsibility to keep track of the amounts deferred and identify the applicable dates.
Sales Tax for Q1 of 2020 is now overdue. Some businesses opted out of paying Sales Tax, in order to pay more immediate operating expenses. With decreased revenue, rising costs, and mounting liabilities, “catching up” to your business taxes can become very difficult. Businesses should assess their finances and taxes in order to facilitate a plan to pay existing obligations.
This year, Corporate Taxes were due on July 16th. For businesses that filed for extensions, the returns are due on October 15th. The extension to file should not be confused with the extension to pay, as corporations are still expected to pay estimated taxes. The taxes for S-Corporations and Partnerships were due on March 16th but for those that filed extensions, the due date is now September 15th.
PPP Loans that have been issued in the wake of COVID can be converted to Grants, if they meet certain criteria. For-profit Businesses need to remember that once the PPP Loan has been converted to a Grant, the expenses paid with the Grant are not deductible.
For more information, or if you’d like to arrange a Complimentary Consultation, contact LEK today! Our Enrolled Agents will help you understand your obligations and walk you through the next steps.
Call 914-562-8154 or fill out the brief form here on our website.