U.S. Rep. Lloyd Smucker (R-PA) recently introduced legislation that would extend the first quarter estimated tax payment deadline for small businesses to May 17. This would align it with the revised individual tax filing date.
Small businesses file estimated tax payments quarterly based on the previous year’s tax filing.
The purpose of the bill is to prevent hardship to small businesses still recovering from the COVID-19 pandemic by aligning the annual tax deadline with the quarterly tax payment.
If the deadline is not changed, some small businesses may be required to pay their first quarter estimated payments before filing their annual taxes.
Businesses could be charged interest or incur penalties for under or over-payment of estimated tax liability.
“It is disappointing that the (Internal Revenue Service)is failing to provide our nation’s small businesses, many of whom are still recovering from the COVID-19 pandemic, with this commonsense flexibility of an aligned deadline for the filing of individual taxes and the first quarter payment deadline,” Smucker said. “A global pandemic is not the time for a punitive approach to small businesses, the backbone of our communities.”
The bill has the support of the American Institute of Certified Public Accountants.