On March 20, 2020 the IRS issued guidance (Notice 2020-18) making clear that the due date for filing tax returns and making tax payments has been extended from April 15 to July 15. This guidance supersedes, restates, and expands upon the prior guidance provided by the IRS in Notice 2020-17.
According to the notice, “any person with a Federal income tax payment or a Federal income tax return due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief.” The term “person” includes an individual, a trust, estate, partnership, association, company, or corporation, as provided in section 7701(a)(1) of the Code.
Affected taxpayers do not have to file Forms 4868 or 7004 to request this extension.
The $1,000,000 cap for individuals and $10,000,000 cap for corporations no longer apply. There is no longer any limit on the amount of the payment that can be deferred.
This means that taxpayers will automatically avoid interest and penalties on taxes paid by July 15, 2020 and only after that date will penalties and interest begin to accrue on any unpaid balances.
The relief applies only to federal income tax payments and federal income tax returns. It includes self-employment tax for 2019. It also includes federal estimated tax payments that are due on April 15, 2020 for the 2020 taxable year. Keep in mind that there is a second estimated tax payment that is due during the deferral period (June 15, 2020). The IRS has not indicated that this is eligible for deferral.
This notice does not provide an extension for the payment or deposit of any other type of federal tax, or the filing of any federal information return.
Because this is considered a postponement and not an extension, the IRS has indicated that also extends the deadline for making contributions to IRAs and HSAs to July 15, 2020.
The notice does not explain whether the extended due date for individual returns will remain October 15, 2020.
The IRS has posted Filing and Payment Deadlines Questions and Answers that covers eligibility, filing and paying your 2019 federal income taxes and your first quarter 2020 Federal estimated income taxes, Individual Retirement Accounts (IRAs) and workplace-based retirement plans, Health Savings Accounts (HSAs), Archer Medical Savings Accounts (MSAs) and more.
Individual state tax filing guidance and relief provisions for the COVID-19 Pandemic is ongoing. The American Institute of Certified Public Accountants has created a State Tax Filing Guidance for Coronavirus Pandemic resource that they are updating regularly.
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