• House Bill 519 – Municipal Extensions & Late Fees
When a taxpayer receives an extension ( including a federal extension ), the bill prohibits the municipal tax administrator , or the Commissioner for state-administered local income tax collection from sending any inquiry or notice regarding the return until after either the taxpayer files the return or the extended due date passes . If a tax administrator sends a prohibited inquiry or notice , the municipality must reimburse the taxpayer for any reasonable costs incurred in responding to it . Notices may be sent if the municipality has actual knowledge that the taxpayer did not actually file for a federal or municipal income tax extension .
Limits the penalty that may be imposed on a taxpayer for failing to timely file municipal income tax returns to a one time $ 25 penalty , rather than the $ 25 monthly , max $ 150 for each return currently in effect & the bill exempts a taxpayer ’ s first failure to timely file penalty and requires the municipality ( or Commissioner ) to be refund or abate the penalty after the taxpayer files the late return
• For Tax Year 2022 , municipal withholding requirements reverted to pre-pandemic rules
Must withhold based on where the employee physically works beginning again in 2022