On April 15, 2020 we posted an update to this blog, “UPDATE: Additional information released about delayed federal tax filing and payment deadlines.” Click here to read the update.
In response to the COVID-19 pandemic and the increased strain placed on individuals and business taxpayers during this time, the IRS has pushed back certain payment and filing deadlines to ease the burden on taxpayers. The Treasury Department and Internal Revenue Service (IRS) announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.
Taxpayers can also defer federal income tax payments due on April 15, 2020 to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. There is no limitation on the amount of any payment postponed. A prior notice published by the IRS only allowed for deferring payments subject to certain limitations. This prior notice is superseded by the most recently published notice.
No additional forms need to be filed to qualify for this automatic federal tax filing and payment relief.
The published guidance, Notice 2020-18, impacts any person with a Federal income tax payment or Federal income tax return due April 15, 2020. No extension was initially provided for the payment or deposit of any other type of Federal tax (non-income taxes), or for the filing of any Federal information return. However, the IRS has since followed-up with Notice 2020-20, which provides a similar automatic deferment for Federal gift and generation-skipping transfer tax payments and returns.
It is worth noting that if a taxpayer is owed a refund, filing an income tax return sooner will ensure that taxpayers receive refunds during this time of economic need. The IRS still estimates that most tax refunds are being issued within 21 days.
The relief provided by the notice is available for the following items:
- Federal income tax payments, which includes payments of tax due on self-employment income, that are due on April 15, 2020 for the 2019 taxable year,
- Federal income tax returns due on April 15, 2020 for the 2019 taxable year, and
- Federal estimated income tax payments due on April 15, 2020 for a taxpayer’s 2020 taxable year are also permitted to be delayed.
- Federal gift tax or generation-skipping transfer tax payments due on April 15, 2020
- Federal gift tax or generation-skipping transfer tax returns due April 15, 2020
The IRS has postponed the filing and payment of certain federal taxes reported on the following forms:
- Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS
- Form 1041, 1041-N, 1041-QFT
- Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF
- Form 8960
- Form 8991
- Form 709
The relief provided does not apply to payroll or excise taxes or filing or payment due dates other than April 15. The relief provided also does not apply to the filing of information returns.
The IRS has confirmed that the relief applies to section 965 installment payments due on April 15, 2020.
Penalties and interest
No additional interest, penalty, or addition to tax will accrue during the period from April 15, 2020 to July 15, 2020 for failure to pay the federal income taxes or file the federal income tax returns postponed by the notice. Such items will begin to accrue on July 16, 2020 if payment or filing is not completed by the extended deadline.
State & local income taxes
Please note that the deadline extension offered by IRS Notice 2020-18 does not negate a taxpayer’s obligation to generally pay its state and local income taxes by April 15. Ohio is among the many states (but not all, as of this writing) that have changed the deadlines for state income tax filings to match the new federal deadline, but the state deferral provisions do not necessarily match the federal deferral provisions. Other states have committed to “following federal guidance,” but have not provided binding guidance. This is a fluid and quick-changing issue. Visit aicpa.org for updates on state tax filing and payment deferrals.
Information about COVID-19 and its impact on local, state and federal levels is changing rapidly. This article may not reflect updates to news, executive orders, legislation and regulations made after its publication date. Visit our COVID-19 resource page to find the most current information.