Gov. Janet Mills said Thursday that Maine’s income tax return filing deadline will be extended to July 15.

Mills announced the move as concern grew that Maine’s deadline was still April 15 even after the federal government extended its income tax filing deadline to July 15 in response to the COVID-19 pandemic.

“It is my hope that moving back this deadline will help provide a measure of relief to Maine people who are struggling to make ends meet as a result of COVID-19,” Mills said in a statement. “The congressional actions in recent days make this move appropriate and practical.”

A disconnect in the two filing deadlines is a problem because state income tax returns are pegged largely to a taxpayer’s federal return and rely on information from that return.

“Basically Maine has a flow-through reporting that’s based on the federal return,” said Dan Chasse, a certified public accountant and the owner of Chasse and Co., an Auburn-based financial consulting firm. Chasse’s company also prepares tax returns for companies and individuals.

During a briefing on the pandemic in Augusta on Tuesday, Mills told reporters, “We are conferring among ourselves and with our own treasuries and revenue services about what we can do and how we can accommodate the federal government’s extension without sacrificing state finances.”

Chasse said clarity from Mills and state government on the issue will help alleviate confusion for individual tax filers who may not fully understand that, for the most part, they’ve already paid most of the taxes they owe the state, through payroll deductions.

Under state law, taxpayers could face late filing fees and interest on any additional tax they may owe if they do not file their state return by the April 15 deadline, Chasse said. Mills’ decision Thursday should alleviate those concerns as well.

“Aligning Maine’s tax filing and payment deadlines with the federal government and waiving late fees and interest payments will ease the number of things that Maine businesses and taxpayers have to think about during this difficult time,” said Commissioner Kirsten Figueroa of the Department of Administrative and Financial Services.

The new deadline applies to any final and estimated Maine income tax payments that were due by April 15. Any failure-to-pay penalties and interest will be abated for the period of April 16 through July 15, Figueroa said.

Lawmakers on the Legislature’s Taxation Committee said the Legislature was unable to pass legislation to conform with the new federal deadline because the Trump administration and Congress took that action after they adjourned.

Rep. Bruce Bickford, R-Auburn, said he and his colleagues were encouraging Mills to send the message to state taxpayers that they can file in July and the Legislature will retroactively pass a bill that would remove interest and penalties for any late filing.

House Speaker Sara Gideon, D-Freeport, also backed the shift in the deadline, according to her spokeswoman, Mary Erin Casale.

“The Speaker believes that, in these extraordinary times, the State should adjust its filing deadline to align with that of the federal government,” Casale said. “Amidst all of the current economic uncertainty, this could provide much needed relief and clarity for many Maine families and small businesses.”

Taxpayers can still file their state and federal income tax returns by April 15 if they have already completed them, but it would be best for those who owe money to either the state or the federal government to be allowed to keep that money for now in light of the financial squeeze the pandemic is putting on households, businesses and the economy, Chasse said.

“The first order of priority should not be to say, ‘Hey look, we kept the (state) budget balanced,'” he said. “The first order of priority for government should be to take care of the people affected by this crisis. That’s got to be the priority.”

Maine People Before Politics, headed by former Republican Gov. Paul LePage, issued a press release Thursday urging Mills to take action and match the federal government on the tax return deadline.

“A tax payment and filing delay like that of the federal government would allow businesses to keep employees paid with the funds which would otherwise go to the tax payment, and hardworking Mainers who owe taxes can use that money during a trying time to make ends meet,” Julie Rabinowitz, director of policy and communications for the organization, said in a statement.

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