July 23, 2020
New Mexico tax department updates guidance on the waiver of interest and penalties for COVID-19 through April 2021 returns filed by July 25
The New Mexico Taxation and Revenue has updated its guidance on legislation enacted on June 29, 2020 that 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. (Bulletin 100.35, revised July 2020.
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. Note, however, that for an employers to receive this waiver of interest and penalties, withholding tax returns must be filed by the extended deadline of July 25, 2020. (Special session 2020 HB 6; news release, governor's office, June 22, 2020.)
Employer withholding return deadlines for March-June extended to July 25, 2020
As we previously reported, the New Mexico Taxation and Revenue Department announced that withholding tax returns normally due on the 25th of March, April, May and June 2020 are due on July 25, 2020. (EY Payroll Newsflash Vol. 21, #278, 7-2-2020.)
According to Bulletin 100.35, the withholding tax return and payment extension includes withholding reported and paid using the combined reporting system (CRS). Withholding being reported and associated payments due between March 25, 2020 and July 25, 2020 may be submitted without penalty no later than July 25, 2020. This return filing extension does not apply to gross receipts tax, governmental gross receipts tax, compensating tax, leased vehicle gross receipt receipts, leased vehicle surcharge (reported using CRS).
In addition, HB-6 allows for taxpayers who have filed their CRS returns timely, including the extension for withholding and normal due dates for gross receipts tax and compensating tax that have been unable to pay timely have until April 25, 2021 to pay the tax due in full without getting assessed late payment penalty or interest. Please note, however, that failure to file withholding returns by the July 25, 2020 extended due date will exclude the taxpayer from the penalty and interest relief through April 25, 2021.
The extension is intended to ease the cash flow problems many businesses facedue to COVID-19closures 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.)
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 in to their accounts.
NOTE that the following warning has been posted to the TAP website:
At this time, you may see penalty and interest associated with your TAP account that is no longer correct based on the passing of penalty and interest relief during this special legislative session. The Taxation and Revenue Department is working on a systematic fix and we are hoping to have this resolved within a few weeks. We apologize for the confusion during this time.
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.
EY Payroll News Flash