The Trump administration gave taxpayers an extra 90 days to file their US tax returns. So why not Massachusetts?
It’s been nearly one week since Treasury Secretary Steve Mnuchin reversed himself and proclaimed that the deadline to file federal forms would be moved to July 15, to provide some relief during this coronavirus pandemic.
The US Treasury originally only planned to extend the deadline to pay, and to keep the traditional April 15 deadline for filing. But accountants around the country flooded Mnuchin with letters of protest. He relented within days. Since that time, most states with personal income taxes adopted their own extension. Yet, still no word from the Massachusetts State House.
The Massachusetts Society of CPAs is so concerned, it launched its own letter-writing campaign on Tuesday. This time, the accountants targeted their local state reps and senators, urging them to pressure Michael Heffernan, Governor Charlie Baker’s administration and finance chief, to extend the deadline until July 15.
Tax preparers are already stressed out enough as they deal with the crush of tax filings while avoiding physical interactions with their clients. Many work from home now, and are less efficient as a result. There’s confusion among clients with this discrepancy. And some taxpayers — namely, the elderly or others who rely on volunteers — might not be able to get any help with filing while the pandemic is in full tilt.
The Baker administration has been hesitant to commit, at least so far, apparently because a delay would interrupt the flow of tax revenue at a time when the state badly needs the influx.
Amy Pitter, the CPA trade association’s chief executive, said she spoke with Heffernan about the delay on Wednesday afternoon. Heffernan, she said, was concerned about cash flow over the next few months as well as making sure the state budget is balanced at the end of the fiscal year on June 30. He would not commit to a time frame for a decision, she said.
As state revenue commissioner from 2011 to 2015, Pitter understands Heffernan’s dilemma. But she sees a few possible solutions to the state’s cash crunch. The state could borrow money, as Rhode Island is doing, to cover the gap until the income taxes are fully collected. The state could dip into itsrainy day fund, which has some $3.5 billion, and pay it back at a later date. Another option, though less preferable to her: an extension to sometime in June, to give the industry and the taxpayers breathing room.
Accountants are getting more concerned by the day. Just ask Lillian Gonzalez, who runs an accounting firm in Stoughton. She said she doesn’t think state officials understand the level of stress they are causing by waiting, as the April 15 deadline marches ever closer. The federal delay could be rendered meaningless if preparers still have to file state returns by April 15, she said, because you essentially need to complete the federal form before filling out the state one.
Numbers provided by the Tax Foundation, a D.C. think tank, show that 34 states plus D.C. have extended their income tax payment and/or filing deadlines, of the 41 states that tax wage income. The Association of International Certified Professional Accountants, a trade group, has a slightly different tally: 22 states plus D.C. have extended to July 15, and six others delayed to a different date, as of Wednesday.
Massachusetts might indeed be next. All Patrick Marvin, a spokesman for Heffernan, would say when asked about the situation is this: “The administration has been in discussions with the Legislature on moving the tax filing deadline and expects to provide additional information soon.”
In a note to clients on Wednesday, law firm Prince Lobel points out reason for hope: On its website, the state revenue department insists it’s working on a plan “to provide relief” with regard to returns and payments. For the state’s beleaguered tax preparers and countless taxpayers, relief can’t come soon enough during this crazy time.