Filing for an Extension of Time for Payment of
Nursing Home Provider Tax
As you know, the first quarterly 2020 Nursing Home Provider Tax payment is due on April 30
. While we had hoped that the State would defer provider tax payments for this quarter, we have learned that the Department of Revenue Services ("DRS") is not authorized under current law to grant a blanket extension for the provider tax payments for any reason, including the COVID-19 public health emergency. As a result, DRS must follow the procedures outlined in the statutes.
The statutes permit an individual facility to file a request for an extension of time to pay the quarterly provider tax. If DRS grants the extension, your first quarter tax payment will not be due until July 31st. If you wish to obtain an extension for the first quarter payment, you will need to file the attached
Form HCP-101 EXT, Application for Extension of Time for Payment of Quarterly Health Care Provider Fees
with DRS. Under the statute, DRS may grant your request only if you have established that making the payment on April 30th will present an "undue hardship" for your facility. The statute defines "undue hardship" as "
substantial risk of defaulting on a bond covenant or similar obligation if such taxpayer were to make payment on the due date of the amount for which the extension is requested."
the COVID-19 pandemic is having an unprecedented impact on all nursing homes in the State, the existence of the pandemic alone will not establish "undue hardship." Instead, you will need to clearly describe the financial impact that the crisis has had on your facility to prevent you from being able to make the payment -- and you must present sufficient documentation to support your claim of "undue hardship." This is very important. Acting DRS Commissioner John Biello has reported that certain facilities that have already submitted applications for a payment extension have not provided sufficient documentation to support their requests. He advised that failure to submit sufficient documentation will result in a denial.
Acting Commissioner Biello provided
examples of the types of documentation that a nursing home would need to provide such as bank account statements if the nursing home is claiming lack of available funds or, if the nursing home is claiming potential default of a bond covenant, copies of a cash on hand analysis and relevant sections of the bond covenant. According to the Acting Commissioner: "The documentation will vary based on the nature of the claim, but in most cases the documentation will not be extensive, it will just be a few pages."
Please note that Acting DRS Commissioner Biello has waived the requirement that you mail your extension request to DRS. Instead, he instructed that nursing homes email the application for extensionsimultaneously to:
The Acting Commissioner indicated that his staff is ready to review provider applications for tax payment extensions immediately and strongly recommends that you file the application as soon as possible but no later than April 20th.