Relief from Filing: Texas Franchise Report and TWC Report

Texas Franchise

The Texas Comptroller of Public Accounts announced that the office will be automatically extending the due date for 2020 Texas franchise tax reports to July 15, 2020, to be consistent with the Internal Revenue Service.

The extension is automatic, meaning that no additional forms need to be submitted to qualify for the extension, and it applies to ALL taxpayers.

There are two types of Franchise taxpayers, Non-Electronic Funds Transfer filers (Non EFT) and Electronic Funds Transfer filers (EFT) and the due date for filing and paying tax liability are dependent on the type of taxpayer you are.

Taxable entities that remitted $10,000 or more in franchise tax payments during the preceding state fiscal year (September 1 through August 30) are required to electronically transmit franchise tax payments to the Comptroller for the subsequent calendar year.

Non-EFT Franchise Taxpayers

Non-EFT filers that need additional time past the July 15th automatic extension, may request an extension on or before July 15th. In addition, the taxpayer must pay at least 90 percent of the tax due for the current year, or 100 percent of the prior year tax with the requested extension, provided the prior report was filed on or before May 14 of the year for which the extension is requested. Non-EFT filers that request an extension beyond July 15th and pay the required tax, will have until January 15, 2021 to file their report and pay the remainder (if any) of the tax due for the current year.

Caution: If the extension request does not meet the payment requirements when the report is filed, penalties and interest will apply to any part of the 90 percent of the tax not paid by July 15, 2020 AND to any part of the 10 percent of the tax not paid by January 15, 2021.

EFT Franchise Taxpayers

On or before July 15, 2020, franchise taxpayers that are mandatory EFT payers may request an extension of time to file to August 17, 2020 and must include payment of 90 percent of the tax due for the current year or 100 percent of the tax reported as due for the prior year with the extension request, provided the prior report was filed on or before May 14 of the year for which the extension is requested.

On or before August 17, 2020, a second extension request can be submitted. This second request extends the time to file the return to January 15, 2021. However, for the extension to be valid, the remainder of any tax liability must be paid with the second extension request.

Caution: Any payments made after August 17, 2020 will be subject to penalties and interest.

Additional limitation to using the 100 percent extension option include the following: A taxable entity that became subject to the franchise tax during 2019 may not use the 100 percent extension option. Additionally, an entity that was included as an affiliate on a 2019 combined group report may also not use the 100 percent extension option if filing as a separate entity in 2020.

Texas Workforce Commission

The Texas Workforce Commission (TWC) has announced that they will be extending the due date for the First Quarter 2020 report filing and tax payment until May 15, 2020.

This extension applies to ALL employers in accordance with the emergency declaration made by Governor Greg Abbott relating to the pandemic.

The TWC is asking that all employers do NOT start filing the first quarter reports until AFTER April 15, 2020 in an effort to assist with the unprecedented amount of internet traffic that both the claimant and employer systems are currently experiencing. The TWC believes that delaying reporting will allow uninterrupted internet access for individuals filing for unemployment and help ensure employers have access to their online accounts.

The TWC has also indicated that if a taxpayer feels that they cannot file their report by the May 15, 2020 deadline, a taxpayer can email tax@twc.state.tx.us with their proposed filing date and COVID-19 justification, after May 1, 2020.

You may also follow along and check for updates on TWC web page for Employers COVID-19 Resources by clicking here.

If you have questions concerning the Comptroller’s extended due date or the TWC first quarter filing extension, please contact your HM&M tax advisor.

For more information check out HM&M’s COVID-19 Resources page.

HM&M COVID-19 Resources