Multistate: More state responses to COVID-19

Listen to a brief overview of state tax developments this week, including a Multistate legislative update.

Detailed Multistate Development

As the country moves forward with re-opening, state and local governments continue to address tax matters stemming from COVID-19. In Michigan, the Department of Treasury issued guidance addressing the effect of telecommuting on City Income Taxes. In sum, Cities cannot tax wages earned outside the City. Thus, if an employer is located in a Michigan City that imposes a city income tax, the wages of a nonresident who telecommutes from home are not subject to tax by the City. The Department suggests that employees keep a log of days worked outside the City.  The Department has also updated its NOL carryback refund request form in light of the CARES Act for Individual Income Tax filers. Form 5603-CARES Act must be used to request a refund arising from a 2018 and 2019 NOL carryback.

The Oregon Department of Revenue has adopted temporary Corporate Activity Tax or CAT rule 15-317-1500 that establishes a penalty waiver for taxpayers making a good faith effort to comply the 2020 tax year installment payments. For tax years beginning on or after January 1, 2020 and ending before January 1, 2021, a good faith effort can be shown in 3 ways: due to the impact of COVID-19, the taxpayer (1) cannot reasonably determine whether they will have CAT liability for the 2020 tax year; (2) lacks sufficient funds to make payments; or (3) cannot reasonably calculate the required quarterly installment or annual tax liability due. The Department may require documentation to substantiate the good faith effort.

In New York, the Department of Taxation and Finance sent out an important notice announcing that individuals and fiduciaries should treat the 6/15 estimated payment as the 1st installment for the 2020 tax year and the 7/15 estimated payment, which was originally due on April 15, but was extended due to COVID-19, as the 2nd installment payment for the 2020 tax year. To read about the recent state and local tax guidance on extensions in response to COVID-19, bookmark KPMG TaxNewsFlash-United States to stay current as more guidance is regularly released. 

This Week's Developments

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Featured Speaker

Sarah McGahan

Sarah McGahan

Managing Director, State & Local Tax, KPMG US