DES MOINES, Iowa — Iowa business owners economically harmed by the COVID-19 pandemic will be given three months of grace to pay their first quarter unemployment taxes, which were originally due April 30 but are now due July 31, 2020.
Eligible employers include those with 50 or fewer employees who are also in good standing with no delinquencies in quarterly payments.
Iowa Gov. Kim Reynolds announced the tax payment extension Monday.
“Iowa’s small businesses are the lifeblood of our communities and the engine behind our economy,” Reynolds said. “Now more than ever, we need to make sure they have the ability to manage their cash flow. It’s critically important that we continue to take steps in support of our small business community during these challenging times.”
To qualify for the extension, the employer must be current on all quarterly tax payments before the first quarter of 2020 regardless of whether or not the employer is seeking an extension of tax payment. All employers must file Quarterly Employers Contribution and Payroll Report electronically by 4:30 p.m. April 24 to avoid late report filing penalty.
First-quarter payments would be due when second-quarter payments are due: July 31, 2020. No interest or penalties will accrue for delayed payments for the eligible group. The extension of payment deadline without interest is not a holiday or forgiveness, and the taxes will be due July 31, 2020. Employers still need to file their quarterly reports, which contain employee wage data necessary to compute benefit eligibility and amounts to be paid.
“More than 95% of businesses in Iowa, or 72,264 employers, have 50 or fewer employees,” said Iowa Workforce Development (IWD) Director Beth Townsend. “They employ a total of 417,536 Iowans and pay approximately $4.2 billion in wages. Providing an extension to paying unemployment insurance taxes will help the vast majority of employers during this difficult time.”
Employers who elect to take advantage of the extension should contact the Unemployment Insurance Tax division at either 1-888-848-7442 or by sending an email to Q1tax@iwd.iowa.gov. An employer wishing to request additional time to pay the tax should also contact the Unemployment Insurance Tax Division. The IWD recommends sending an email versus a phone call as there is a high call volume during this time, which might lead to extended wait times. Employers must notify the IWD of intent to delay payment by Friday, April 24 at 4:30 p.m.