Information current as of December 31, 2020.
The SARS-CoV-2 virus and the incidence of COVID-19 are changing life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor™ or visit our COVID-19 Resource Center for current information as needed.
Information Specific to Wisconsin
- Wisconsin announced an extension to July 15, 2020, for corporate and individual income tax payments, estimated income tax payments and returns due April 15, 2020.
- Wisconsin DOR Notice, March 21, 2020.
- Wisconsin will permit small businesses to request an extension to file sales and use tax returns due March 31, 2020, until April 30, 2020, and due April 30, 2020, until June 1, 2020. The DOR will not assess late filing fees or penalties but interest will accrue by law, unless the legislature changes the law to allow the DOR to waive interest.
- DOR Notice, March 27, 2020.
- Wisconsin issued proposed guidance regarding filing tax extensions as a result of the COVID-19 pandemic. Federal extensions provided in IRS Notices 2020-18 and 2020-23 may be used for Wisconsin corporate income and personal income/franchise tax and pass-through withholding tax purposes. For returns that are due on or after April 1, 2020, and before July 15, 2020 (including estimated tax payments), regardless if it’s the original or extended due date, the due date is extended to July 15, 2020. Unpaid income and franchise taxes and pass-through withholding taxes due on or after April 1, 2020, and before July 15, 2020, won’t accrue interest or penalties until July 16, 2020. In addition, no underpayment interest will apply to any estimated tax payments due for the period of a return if either of the following apply: (1) the return has a taxable year ending December 31, 2019; or (2) the return is a fiscal-year or short-period return with an original or extended federal due date on or after April 1, 2020, and before July 15, 2020. Although contributions to a Wisconsin college savings account must be made by April 15, 2020, to qualify for the 2019 Wisconsin income tax return subtraction, the date for making contributions to an IRA is postponed to July 15, 2020. Taxpayers also may request a one-month extension to file a withholding deposit report (WT-6). Lastly, the payment from the federal CARES Act (P.L. 116-136) isn’t taxable for federal or Wisconsin income tax purposes, and the IRS won’t use a taxpayer’s federal economic impact payment to pay federal or state tax debts but will use it to pay past-due child support payments that the states have reported to the IRS.
- Wisconsin DOR News for Tax Practitioners, April 10, 2020.
- Wisconsin announced more filing and payment deadline extensions to conform with IRS Notice 2020-23. Estimated payments due on or after April 1, 2020, and before July 15, 2020 are extended to July 15, 2020. Underpayment interest on estimated payments won’t apply to income/franchise and pass-through withholding returns with a tax year ending on December 31, 2019, or returns that are due on or after April 1, 2020, and before July 15, 2020.
- Wisconsin DOR Notice, April 13, 2020.
- Wisconsin legislation to conform state tax law with federal coronavirus responses. The bill will exempt certain retirement account distributions from tax; permit deductions for certain charitable contributions; permit loan forgiveness on a tax-free basis under the federal small business loan program; and exclude from income student loan payments made by an employer to qualified employees. In addition, the bill grants the DOR authority to waive interest and penalties in cases where a taxpayer fails to timely remit taxes due to the pandemic.
- A.B. 1038, effective April 15, 2020.
- Wisconsin will not consider an out-of-state business to have nexus if its only Wisconsin activity is having an employee working temporarily from the employee’s home during the pandemic. Telecommuting employees continue to report their income based on the guidance in Wisconsin Tax Bulletin 171.
- Wisconsin DOR Withholding Tax Update 2020-1 and Tax Bulletin 211, November 1, 2020.