There were various factual debates over my post on tax payments yesterday, and these updates are worth special attention. A morning conversation with a certified public accounting familiar with Virginia taxes brought to light the following:
- If you fail to file a state return by May 1, the six-month extension truly is automatic. Your return is not considered “late” until November. The state doesn’t care. You don’t need to request the extension.
- If by June 1 the state has received tax payments either equal to what you paid for 2018, or 90% of your eventual 2019 liability, there is no penalty assessed once your return is settled.
- The issue of interest on late payments will be addressed at the Reconvened General Assembly session on April 22, and it can take action to relieve taxpayers of that concern during this crisis. Our debate may have spurred an announcement on that before the day is done.
- You do not need to have filed a federal tax return to file your state return, should you choose to. If owed a refund by the state, while owing an additional payment to the feds, file the state return now and the federal return in July. It creates no problem for the state.
- Virginia is just weeks away from the end of its fiscal year June 30 and is constitutionally barred from deficit spending. Even the General Assembly could not have authorized a delay in the payment deadline beyond June 30 without risking a major financial default. As I’ve been saying with regard to businesses and government, cash flow is crucial.