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July 6, 2020
2020-1716

New Mexico law waives interest and penalties till April 2021 for withholding tax due March-July 2020 for COVID-19

New Mexico legislation enacted on June 29, 2020 waives interest and penalties for failure to pay several state taxes during the COVID-19 pandemic, including income, corporate, gross receipts and employer withholding tax.

Under the law, failure to make withholding tax payments due March 25, 2020 through July 25, 2020 will not result in interest and penalties if paid by April 25, 2021. (Special session 2020 HB 6; news release, governor's office, June 22, 2020.)

Employer withholding return deadlines for March-June 2020 extended to July 25, 2020

As we previously reported, the Department announced that withholding taxes normally due on the 25th of March, April, May and June 2020 are due on July 25, 2020. The extension is intended to ease cash flow problems that many businesses face due to COVID-19 closures or reduced customer traffic and may prevent some businesses from laying off employees. Go here for more information. (EY Payroll Newsflash Vol. 21, #094, 3-24-2020.)

The state will waive any penalties for withholding taxes not remitted during the grace period. However, under state law, and as reported by the Department, interest will accrue from the original due date for withholding tax filers.

Self-service payment plan available

As we previously reported, the New Mexico Taxation and Revenue Department recently announced that taxpayers with outstanding debts can create and enter into a payment plan through a self-serve option. The new program is available for all tax programs administered by the Department, including withholding tax. (EY Payroll Newsflash Vol. 21, #271, 6-24-2020.)

The self-service option allows taxpayers to create a custom payment plan for tax, penalty and interest. Taxpayers can choose the size of their down payment and the duration of the plan up to 72 months. Plans longer than 12 months require that a lien be put in place. Eligible participants will be accepted automatically; others will be contacted by a TRD employee to complete the process.

More information is available on the Department's website, through the New Mexico Taxpayer Access Point (TAP). Taxpayers will see the self-serve option once they've logged into their accounts.

The Department also announced it will extend some modifications to collection efforts that were enacted to ease the burden on taxpayers facing financial difficulty as a result of the COVID-19 public health emergency.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)
   • Peter Berard (peter.berard@ey.com)

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