March 25, 2020
Written by Mike Hirte, CPA, Managing Partner
Within days of deferring the tax payment deadline from April 15th to July 15th, the IRS issued Notice 2020-18 which also defers the tax filing deadline from April 15, 2020 to July 15, 2020.
On March 24th, the IRS began to clarify the impact of Notice 2020-18 and released a Frequently Asked Questions report. Below is a summary of information you need to know.
- The guidance is applicable to any person with a federal income tax return or payment due on April 15, 2020. A “person” includes an individual, a trust, an estate, a partnership, a corporation, or an association.
- To be eligible for relief under the notice, a taxpayer only has to have a federal income tax payment or return due on April 15, 2020. The taxpayer does not have to be sick, quarantined, or otherwise impacted by COVID-19 to qualify.
- The deferral to July 15th is automatic. No action is required before April 15th.
- All federal income tax payments (including payments of tax on self-employment income) for the 2019 tax year and the Q1 2020 federal estimated income tax payments (including payments for self-employment income) that have historically been due on April 15th are now due on July 15th.
- The new guidance removes the $1 million limit for non-corporate taxpayers on the amount of tax obligation deferred to July 15th. There is now no limit on the amount of federal income tax payments that may be deferred.
- The deadline for making 2019 IRA contributions is now July 15, 2020.
- The deadline for making 2019 HSA contributions is now July 15, 2020.
- Taxpayers who have a filing or payment date other than April 15th are not granted relief at this time.
- Estate and gift taxes are not granted relief: normal filing and payment dates continue to apply.
- This relief is available with respect to federal income tax payments only. No deferral is provided for the payment or deposit of any other type of federal tax (e.g., installment agreement obligation, payroll taxes, etc.) or for the filing of any federal information return.
- There is currently no change to the Q2 2020 federal estimated payment due June 15, 2020.
- Some states are following the IRS’ lead and will conform their tax filing and payment schedules to those of the IRS. This will continue to evolve over the upcoming days. You should confirm status with your tax professional; however, recent state updates are being posted to the following website: https://www.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/coronavirus-state-filing-relief.pdf
We will continue to keep you informed of new tax developments as the government addresses this evolving COVID-19 pandemic. If you have any questions, please do not hesitate to reach out to a member of the MRA Associates team.