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COVID-19 Tax Update

The Texas Comptroller announced April 2, 2020, that his agency is automatically extending the due dates for all 2020 Texas franchise tax reports to July 15 so it is consistent with the Internal Revenue Services (IRS).  Since this is an automatic extension applying to all franchise taxpayers, no additional forms need to be completed and filed.

Comptroller Glenn Hegar commented, “In addition to coping with the unprecedented impacts of the growing pandemic, we understand the difficulty Texas businesses will face in filing franchise tax returns now that the federal deadline has moved, and so we thought it appropriate to align the state’s franchise tax deadline with the IRS deadline.”

EFT and non-EFT franchise taxpayers may request an extension beyond the July 15 deadline by filing a request with the Texas Comptrollers’ office.  Options for franchise taxpayers requesting an extension by July 15 are listed below.

EFT: Mandatory EFT payers may request a filing extension to August 15.  They must pay 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.  On or before August 15, EFT franchise taxpayers may request a second filing extension to January 15, 2021, however, they must pay the remainder of any tax due with their extension request.  Any payments made after August 15 will be subject to penalty and interest.

Non-EFT: If the extension request meets the payment requirements when the report is filed, the non-EFT must pay 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.  The non-EFT franchise will have until January 15, 2021 to file their report and pay the remainder of the tax due.  If the extension request does not meet the payment requirements when the report is filed, penalty and interest will apply to any part of the 90% of the tax not paid by July 15 and to any part of the 10% of the tax not paid by January 15, 2021.

It can be difficult to make sense of all the new legislation passed in the wake of COVID-19. Contact us to help you navigate through this pandemic and check out our COVID-19 Resources page for more information.

Lori Morales, CPA

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832.782.5924
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