California Small Businesses Given Several Tax Extensions by Executive Order

On Tuesday, Governor Gavin Newsom signed an Executive Order granting small businesses across California time extensions over filing taxes, refunds, and for different business licenses due to timing and staffing issues stemming from the COVID-19 coronavirus pandemic.

Under Executive Order N-40-20, small businesses whose returns are under $1 million will have another 90 days to file their tax returns and to settle any payments due at that time. The California Department of Tax and Fee Administration (CDTFA) would only begin to send notices to businesses who failed to file beginning on August 1st.

The deadline for tax refund claims was also extended by 60 days, setting a hard June 30th deadline.

In addition, the order extends business license renewals, trainings, and applications also by 60 days. For example, many restaurants operating on a take-out basis will not need to renew any license on the verge of expiring for the next two months. Newsom specifically noted in his press release that the Department of Consumer Affairs will also waive continuing education requirements for several professions until the end of June.

Finally, all public safety officer and state worker misconduct and adverse action investigations were extended by 60 days to complete due to the coronavirus outbreak disrupting many investigations

“This buys a lot of businesses, and by extension their workers, time,” explained small business tax preparer Sandra Hall. “Not having deadlines until this summer will give them the time needed to recover from lost business they experienced due to the state stay-at-home order. Many small business owners may not be able to meet with an accountant or a preparer like me either.”

“While some businesses can do it remotely, others may not. Sometimes a face-to-face with a box of files is still the way to go. The coronavirus delay may have also delayed any final forms or needed papers from last year. Maybe a company needs to send them a copy of a receipt the filer lost, but because of the coronavirus, they can’t dig it out now or access computer records.”

“The big takeaway from this Executive Order is that it continues the trend of shifting everything tax-wise to later in the year. There’s not enough manpower and open businesses right now to make it feasible.”

“If you own a business and can do it, state workers are still processing taxes, as are federal IRS workers for federal,, and they’re fine with taking them now. But this gives all affected businesses time.”

The federal income tax filing date had been previously moved earlier this month from April 15th to July 15th.