The state’s largest accounting trade association – the New Jersey Society of CPA’s – is pressing lawmakers for an extension on tax filing and payment deadlines amid the pandemic.
“Once the American Rescue Plan is signed by President [Joe] Biden, the IRS is expected to extend the April 15 tax filing deadline,” reads a March 11 statement from the NJSCPA. “The [NJCPA] is calling on New Jersey lawmakers to follow suit.”
According to the White House public schedule, Biden is scheduled to sign the $1.9 trillion relief package at 1:30 p.m. on March 11.
Last year, Gov. Phil Murphy and the state Legislature agreed to extend the filing deadline for state income and business taxes from April 15 to July 15, after the federal Internal Revenue Service offered the same extension.
Proponents contended the move would take the stress off many tax filers amid surges in joblessness amid mass business closures.
“If New Jersey does not conform to an IRS postponed filing deadline, it will, in effect, negate the benefits of the federal deadline extension,” the NJSCPA added.
This year, the American Institute of CPA’s is asking the IRS to extend the deadline by two months, from April 15 to June 15.
Last year’s three-month extension meant that the state had to in turn extend its budget for three months, expiring on Sept. 30 rather than June 30. That was in part for the state treasury and elected officials to fully gauge the effect of the pandemic on state tax revenue.
After tax filings are complete, the state Treasurer in May presents top budget lawmakers in the following month with a picture of the state’s financial outlook for the remainder of the fiscal year, which expires typically on June 30. And it is not clear just what kind of impact a two-month extension could have on state budget talks.
The NJCPA acknowledged in its letters that given the June deadline, an extension could only carry on to that month at the latest in order to leave this year’s budget process unscathed.
Representatives for the Senate and Assembly Democratic offices, which hold the most seats in their respective chambers, did not immediately return requests on March 11 for comment, nor did the governor’s office of State Treasury.
“We recognize the difficulties a postponement of the filing and payment deadlines could create,” the NJSCPA noted. “[H]owever, COVID-19 and other circumstances necessitate action to ensure that the millions of affected taxpayers have sufficient time to meet their tax obligations.”
Mass business closures enacted in a bid to clamp down on the spread of the virus have shattered the economy and driven up unemployment.
But the impact on the tax money for the state – from the sales, business and income tax – was far more blunted than some of state official’s worst fears. Stellar financial performance in those three income sources means Murphy’s $45 billion Fiscal Year 2022 budget, which runs July 1 to June 30, 2022, will not include any new tax increases.