Small businesses, independent contractors, and other self-employed citizens are some sectors that have been the most severely impacted by the COVID-19 pandemic. Given the success of the previous stimulus package, the State of Maryland is now offering pandemic-related tax relief for some small businesses and self-employed people in Maryland.

When economic relief was first offered at the start of the pandemic, Maryland officials noticed it didn’t have a big impact on the state’s budget and was extremely successful in stabilizing the economy and small businesses that were hit hard. With this in mind, a new initiative was implemented to support local businesses and contractors.

What is the economic stimulus tax relief and how will it benefit me?

On Wednesday, Maryland Comptroller Peter Franchot announced small businesses, self-employed people, and independent contractors are now receiving extensions for certain tax filing and payment deadlines The goal here is to support small businesses by allowing them to keep their money, and in turn, contribute to the economy. Franchot explained that the extension will serve as both an interest-free loan and economic stimulus to Maryland’s small businesses and contractors.

When will I have to pay my taxes?

The taxes will eventually have to be paid; businesses and self-employed people or independent contractors whose income tax returns and payments were due on January 15 will be provided extensions until April 15. Another benefit to this initiative is that the extension is automatic, meaning they don’t need to file a request.

Those eligible for the extensions should note that:

1. Relief only strictly applies to state taxes administered by the comptroller and excludes personal property taxes or unemployment insurance.
2. The due date for taxes from sales and the use of alcohol, tobacco, and motor fuel is between January 1 and April 14.

Franchot has sent a letter to the Internal Revenue Service with a request to extend the federal tax payment deadline as well. For now, small businesses and those who are self-employed will receive a 90-day tax-filing extension, for the purpose of allowing them to allocate the money towards their business expenses, while also contributing to a growing economy.

Questions? Ask our team at BradyRenner CPAs today >>

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