July 22, 2020
Louisiana law waives penalty and interest for late income tax withholding tax returns and payments due to COVID-19
Louisiana Governor John Bel Edwards has signed into law HB37, which, effective July 1, 2020, authorizes the Louisiana Department of Revenue to waive all interest and penalties for the late filing of any tax return or the late payment of any tax due with an original due date occurring during the period March 11, 2020 and July 15, 2020. The provision includes income tax withholding returns and payments.
The interest and penalty waiver apply if the health of the taxpayer or the taxpayer's tax preparer was affected by COVID-19 on or after March 11, 2020, and on or before July 15, 2020.
This relief does do not apply to any tax return filed or any payment made after November 15, 2020.
Taxpayers will request relief through an application to be made available by the Louisiana Department of Revenue.
Ernst & Young LLP insights
This legislation brings welcome relief to businesses that were late in filing and making deposits of income tax withholding because the Louisiana Department of Revenue did not offer an extension on these filing and tax payment due dates in connection with COVID-19.
Note the interest and penalty waiver does not apply to Louisiana state unemployment insurance (SUI) returns and contributions. According to a Louisiana Workforce Commission (LWC) website, the due date for the second-quarter 2020 SUI wage and tax reports and SUI tax payment are deferred to September 15, 2020 to further assist Louisiana employers during the COVID-19 national emergency.
LWC extended the filing deadline for first-quarter 2020 SUI returns and payment to June 30, 2020, with interest and penalties applicable beginning July 1, 2020. (Employer electronic reporting portal.)
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