Important Compliance Updates for DC Organizations
As states move to streamline their tax and reporting systems, more filings are being offered for submission through electronic channels such as state business portals. The District of Columbia has been no stranger to this phenomenon, with multiple portals available through their Office of Tax and Revenue (OTR), the Department of Consumer and Regulatory Affairs (DCRA), and the Department of Employment Services (DOES).
Office of Tax and Revenue Portal
The DC OTR set-up MyTax.DC.gov, the online compliance and tax portal, in November 2016. This portal “makes viewing and paying Individual Income and Business taxes in the District of Columbia – simpler, faster, safer” and offers a variety of account services for compliance concerns. If you are operating within the District of Columbia, you’ll want to be sure that your organization has set-up its MyTax.DC portal account. The DC Office of Tax and Revenue (OTR) offers simple step-by-step instructions for enrolling in the portal through their MyTax.DC.gov User Guide, making enrollment a hassle-free process. Although DC allows for some processes to be completed without logging into a portal account, there are many more services which can only be completed from inside a specific account.
Personal Property Tax Filings for 2020
Of particular note is a recent change impacting the DC Personal Property Tax filings (Form FP-31). Beginning with the 2020 filing year, all individuals, corporations, partnerships, executors, administrators, guardians, receivers, and trustees that own or hold personal property in trust will be required to file and submit their annual DC personal property tax (PPT) returns and payments via the MyTax.DC.gov portal. The returns may continue to be prepared by a third party that has been authorized by the taxpayer. Because this will impact personal property tax returns due to be filed by July 31, 2019 for the 2020 tax year, we recommend DC taxpayers verify they are registered with the DC Office of Tax and Revenue and that they have a valid username and password to use the MyTax.DC.gov website. New business registrations for the MyTax.Dc.gov website will have a three to five day wait to receive the notice that contains the material needed to complete the online registration process, so we encourage new users to begin this process as soon as possible.
Paid Family Leave Tax
Starting July 1, 2019, DC will collect an additional payroll tax from all private sector employers in the District to fund the Paid Family Leave (PFL) Implementation Fund. The PFL Fund will provide private sector workers in DC with access to up to 8 weeks of family leave, subject to a maximum benefit of $1,000 per week. Employers will pay the 0.62% tax in quarterly installments, based upon the immediate preceding three months of wages. For the PFL quarterly report due July 1, 2019, the tax will be based on wages paid to eligible workers from April, May, and June 2019—therefore employers need to start tracking wages now. Employees are not subject to this tax, and the employer-share may not be deducted from a worker’s paycheck.
For organizations that already have an existing account at the Employer Self-Service Portal (ESSP) for Unemployment Insurance, the wage reports can be filed and tax paid at your account. Organizations without a pre-existing ESSP account will need to register for the account. Additional information on employer obligations relating to the PFL Implementation Fund tax can be found at the DC Office of Paid Family Leave website.
Please contact us if you have any questions or need any assistance in this area.