NH's Tax Relief for Businesses

In response to the COVID-19 pandemic, the NH Department of Revenue Administration (NHDRA) is granting automatic relief to Business Profits Tax (BPT), Business Enterprise Tax (BET) and Interest & Dividends Tax (I&D) taxpayers in the form of payment relief and expansion of automatic filing extensions and penalty safe harbors. Details of the relief are outlined in a release issued by the NHDRA on March 30, which can be viewed at www.revenue.nh.gov/tirs/documents/2020-001.pdf.

What is the payment relief and who qualifies?

Relief is available for certain BPT, BET and I&D taxpayers affected by COVID-19 pandemic and unable to pay the amount due on April 15, 2020. Those qualifying taxpayers will have until June 15, 2020 to remit payment without typical penalties and interest. This extended due date is in addition to the expansion of the qualifications for the automatic extension and the estimate payment safe harbor.

Taxpayers who qualify for this specific relief are Business Tax taxpayers who owed $50,000 or less in taxes (total BPT and BET tax liability) for the tax year 2018 and I&D taxpayers who owed $10,000 or less in taxes for the tax year 2018. These thresholds account for 98 percent of all BPT, BET and I&D taxpayers.

What do I need to pay on April 15 (or June 15, if applicable) to qualify for extensions and safe harbors?

Filing Extension

Under current law, if 2019 BPT, BET, and I&D taxes were paid in full by April 15, taxpayers are entitled to an automatic seven-month extension to file their return without incurring a failure to file penalty.

Since the IRS extended the federal tax filing deadline for the tax year 2019 to July 15, 2020, BPT, BET, and I&D taxpayers may have trouble accurately calculating the final amount of taxes owed to NH, meaning they may not have paid in full by April 15, deeming them ineligible for the traditional automatic seven-month filing extension.

To provide relief for those faced with this scenario, BPT, BET and I&D taxpayers who have paid at least the amount they owed for the 2018 tax year by April 15, 2020, will not be subject to any penalties or interest, so long as they file their returns and pay tax year 2019 in full within the automatic seven-month extension, by November 15, 2020.

Estimate Safe Harbor

The tax year 2020 quarterly estimated tax payments are also due on April 15, 2020, for BPT, BET, and I&D Taxpayers. Normally, a failure to make quarterly estimated tax payments in the appropriate amount would result in underpayment penalties at the time the return is filed. Existing safe harbors will be expanded to allow for no penalties due to the underpayment of estimates if 2020 quarterly payments total 100 percent of what was owed in the tax year 2018, with at least 25 percent due in each quarter. Taxpayers may also elect to continue using existing acceptable methods to calculate their quarterly estimated payments, such as annualizing their income or using their tax year 2019 liability, if known. 

What does it mean when the payment relief is combined with the extensions and safe harbors?

The chart below breaks down the deadlines and thresholds under NHDRA’s COVID-19 relief program.

BPT and BET Taxes

I&D Tax

“This relief expands the circumstances typically required for taxpayers to qualify for an automatic filing extension, and protects taxpayers from penalties and interest they may have otherwise faced from complications associated with the July 15 federal due date,” said NHDRA Commissioner Lindsey Stepp. “We sympathize with taxpayers during this uncertain time and anticipate this relief will help put them at ease as we all continue to navigate this rapidly changing situation.”

NHDRA’s Taxpayer Services Division is available to answer all filing questions. Contact the Taxpayer Services Division by phone at (603) 230-5000 (select option 2), Monday through Friday, 8 am to 4:30 pm. Although extra staff will be on standby to assist with taxpayer inquiries, taxpayers could experience longer than usual wait times on phones.