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Home Affordable Care Act Know your Tax Relief and ACA Compliance Obligations during the Pandemic: California Governor’s Executive Order brings Property Tax penalty Relief

Know your Tax Relief and ACA Compliance Obligations during the Pandemic: California Governor’s Executive Order brings Property Tax penalty Relief

2 minute read
by Maxfield Marquardt

2 minute read:

On May 6, 2020 California Governor Gavin Newsom issued Executive Order N-61-20 providing some property tax penalty relief to individual and small business taxpayer’s who have been affected by the COVID-19 pandemic. The order applies individuals or small business that owe real property taxes and are unable to make timely payments through May 6, 2021. To qualify as a small business, you need to meet the Federal standard in 13 CFR 121.201.

The order suspends penalties, costs, or interest for failure to pay property taxes timely with a few caveats. One, the property taxes in question could not be delinquent prior to March 4, 2020. Two, the taxpayer will have to formally request the relief in a form and manner prescribed by California tax authorities. Three, the taxpayer must be able to demonstrate that it has suffered economic hardship or was otherwise unable to pay the applicable property taxes in a timely fashion due to the COVID 19 pandemic. For those that qualify, the penalties, costs and interest are suspended through May 6, 2021.

The order also applies to installment plan payments that fall after the March 4, 2020 date for taxpayers who made all required pre-March 4, 2020 payments timely.

While the order does not forgive the underlying property tax obligations, the removal of the penalties, costs and interests essentially extends the due day for those tax payments for a full year. Those that seek to take advantage of the executive order should be careful to fully document their COVID-19 related economic hardship. As of yet, the Franchise Tax Board has not released any guidance on the form that a taxpayer will be required use to substantiate this requirement.

For more information on COVID-19 taxpayer relief, see our prior article on the employer relief provisions of the CARES Act. Small businesses should also make sure they review our guidance on workforce management and ACA compliance during the pandemic as there has been no indication from the IRS that they will be suspending ACA penalties related to the Employer Mandate.

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Know your Tax Relief and ACA Compliance Obligations during the Pandemic: California Governor’s Executive Order brings Property Tax penalty Relief
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Know your Tax Relief and ACA Compliance Obligations during the Pandemic: California Governor’s Executive Order brings Property Tax penalty Relief
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California Governor’s executive order brings property tax penalty relief during the COVID-19 Pandemic.
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The ACA Times
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