On April 9, 2020, the U.S. Department of Treasury and the Internal Revenue Service (“IRS”) announced that additional tax deadlines for individuals and businesses have been extended due to the COVID-19 pandemic. Last month, the IRS announced that taxpayers generally have until July 15, 2020, to file and pay federal income taxes that are due on April 15, without being subject to interest and late-filing or late-payment penalties.
Notice 2020-23, Update to Notice 2020-18, Additional Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic, expands this relief to additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers, including fiscal-year businesses, tax-exempt organizations and certain estates and trusts, that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.
Individual and business taxpayers who need additional time to file their tax returns beyond the July 15, 2020 deadline can still request a filing extension. An extension to file is not an extension to pay any taxes owed. Taxpayers requesting additional time to file should estimate their tax liability and pay any taxes owed by the July 15, 2020 deadline, to avoid additional interest and penalties.
Estimated Tax Payments
The April 15, 2020 quarterly estimated tax payment was previously extended by the IRS, and today’s notice also extends relief to quarterly estimated tax payments due on June 15, 2020. This means that any individual or corporation that has an estimated tax payment due on or after April 1, 2020 and before July 15, 2020, can wait until July 15, 2020 to make that payment, without penalty. As of today, estimated payments for the third quarter are still scheduled to be due on September 15. Taxpayers should keep this in mind, especially if they wait to make their first and second quarter estimated tax payments on July 15, that the third estimated payment will be due just two months later, they will effectively be making three estimated tax payments in a two-month period (July 15 – September 15, 2020). Taxpayers will need to budget their cash flow accordingly.
For more information on these additional filing and payment extensions, refer to IRS New Release, IR-2020-66, IRS extends more tax deadlines to cover individuals, trusts, estates corporations and others. Individuals and businesses also need to determine if applicable state and local taxing jurisdictions are providing similar relief for corresponding return filings and payments. These jurisdictions may not necessarily follow Federal guidelines for extensions. The American Institute of Certified Public Accountants (“AICPA”) has complied a chart tracking state-by-state tax filing and payment due date relief for individuals and businesses. For the latest developments on state tax filing relief related to COVID-19, click here.
If you have questions about how the additional extensions announced today affect the timing of filing of paying your Federal or state tax return or any amount due, please call or email your Tronconi Segarra & Associates tax advisor, or contact our COVID-19 response team at email@example.com.