COVID-19 Business enterprise Closures and Ensuing Unique Tax Effects

<i>Closed sign in the storefront of a hair salon during the COVID-19 pandemic. Photo: VDB Photos/Shutterstock</i> Shut signal in the storefront of a hair salon all through the COVID-19 pandemic. Image: VDB Shots/Shutterstock

The 12 months 2020 commenced as a “Year of Vision” for most folks, wherein they envisioned private and company progress, good results and wealth. That eyesight quickly shattered as the novel Coronavirus turned a pandemic that altered day by day lifetime, in particular in New York condition (NYS) when it was declared the epicenter of the pandemic. In reaction, NYS Governor Andrew Cuomo issued a “PAUSE” get which, in part, shut and/or restricted ability for certain organizations, up to this date. While this mitigation tactic managed the distribute of the virus, several companies and persons are however not able to get better from the devastating fiscal outcomes from the limits. This article focuses on the NYS and federal tax consequences for businesses and individuals, as effectively as probable remedies.

The NYS Dept. of Taxation and Finance (NYS Tax Dept.), as properly as the Inside Revenue Services (IRS) (collectively, “the taxing authorities”) have issued numerous varieties of tax reduction due to the fact March 2020, setting up with deferring all adverse assortment exercise, extending submitting deadlines, abating late payment penalties and presenting specific company tax credits, adopted by extending payment agreement deadlines. Nonetheless, taxpayers are envisioned to totally comply with all submitting and payment obligations when the reduction expires. Taxpayers that are unable to comply are needed to get in touch with the taxing authorities to receive additional extensions and/or to protected collection solutions for all remarkable tax liabilities.