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 deadlines to ease the burden on taxpayers.

The plan that was published as of this writing, Notice 2020-17 (the “Notice”), impacts any person with a Federal income tax payment due April 15, 2020. The Notice postpones such Federal income tax payments to July 15, 2020, subject to certain limitations.

While the Notice does not provide an extension for the filing of any tax return or information return, and no extension is provided for the payment or deposit of any other type of Federal tax (non-income taxes), U.S. Secretary of the Treasury Steven Mnuchin stated on March 20, 2020 that the filing deadline for individuals and businesses will also be postponed to July 15, 2020, allowing additional time to file and make payments without interest or penalties. Written IRS guidance has yet to be published detailing the mechanics of the filing date change, so it is unclear as of this writing whether payments in excess of the limitations outlined below can also be postponed to July 15, 2020. We will update this post as additional guidance is published. 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.

During his press conference announcing the payment deferral, the Treasury Secretary suggested that such deferral would be “automatic” upon the filing of a tax return where payments would be due; however, the Notice leaves the question of how to request or indicate a deferment, as well as others, unanswered.

The relief provided by the Notice is available for 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 estimated income tax payments due on April 15, 2020 for a taxpayer’s 2020 taxable year are also permitted to be delayed.

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 postponed by the Notice. Such items will begin to accrue on July 16, 2020 if payment is not made by the extended deadline. Further, interest, penalties and additions to tax will accrue without suspension or deferral on any amounts in excess of the above-referenced limitations that are not paid on April 15, 2020.

Typically a taxpayer must seek relief from payment penalties by identifying a reasonable cause for the error that gave rise to such penalties. The Notice specifically contemplates taxpayers that are subject to penalties or additions to tax, despite the relief provided, pursuing reasonable cause relief or seeking a waiver to a penalty for a failure by an individual or certain trusts and estates to pay estimated income tax, as applicable. However, the Notice states that similar relief with respect to estimated tax payments is not available for corporate taxpayers or tax-exempt organizations.


The maximum amount that can be postponed under the Notice is $10,000,000 for each C corporation or consolidated group of corporations. For all other taxpayers, the maximum amount that can be postponed under the Notice is $1,000,000 regardless of filing status. It appears that this $1,000,000 limitation would apply to individual partners of partnerships and S corporation shareholders. For example, the maximum amount that can be postponed is $1,000,000 for both single individuals and married individuals filing a joint return.

State & Local Income Taxes

Please note that the payment deadline extension offered by IRS Notice 2020-17 does not negate a taxpayer’s obligation to generally pay its state and local income taxes by April 15.  As of this writing, only California, Colorado, Maryland, and Massachusetts have offered what might be considered “binding” guidance regarding deferrals of state income tax payments, but the state deferral provisions do not necessarily match the federal deferral provisions. Other states have committed to “following federal guidance,” but haven’t provided binding guidance. This is a fluid and quick-changing issue.  Visit aicpa.org for updates on state tax payment deferrals.

This information does not constitute tax or legal advice. For information and guidance on how this tax alert may affect your tax situation, please reach out to your personal tax professional.