NOTE: The below represents an update to our original blog of the same title, amended to incorporate Treasury’s superseding guidance.
Treasury Secretary Steve Mnuchin announced March 20 that taxpayers will now have 90 extra days to fulfill their federal income tax obligations, extending the April 15, 2020, deadline for tax filing and payments to July 15, 2020.
The IRS released superseding guidance in Notice 2020-18, stating that the extension was a result of President Trump’s issuance of an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act due to the COVID-19 pandemic. While the original Notice extended the deadline for payments only, the superseding Notice extends both the payment and filing deadlines to July 15.
“The Emergency Declaration instructed the Secretary of the Treasury ‘to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency,’” according to the Notice.
The IRS announced that the extension applies to the due date for filing Federal income tax returns and making Federal income tax payments, including estimated tax payments, due April 15, 2020. This is automatic so that affected Taxpayers do not have to file extension forms. The superseding Notice eliminated the caps on postponed payment amounts—under the updated notice, there is no limitation on the amount of the payment that may be postponed.
While not addressed in the notice, Taxpayers who desire to have a filing date beyond July 15, 2020 should file an application for extension on Form 4868 or 7004.
The relief provided is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of a Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020 for a Taxpayer’s 2020 taxable year.
No extension is provided for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return. Accordingly, claims for refund for which the three year statute of limitations would expire on April 15 must still be filed by this time. The April 15 deadline will be disregarded in terms of calculating interest or penalties, including those for failure to file the Federal income tax return or failure to pay the Federal income taxes postponed. Accrual of interest, penalties, and other additions will resume July 16, 2020.
Secretary Mnuchin stated that this extension was put in place to ensure that “hardworking Americans and businesses have additional liquidity for the next several months.”
If you still have questions about the extension or about related policy changes please feel free to contact our firm with any questions that you might have during this time by clicking here.