(Author’s Note: After this article was published, on March 20, 2020, Treasury Secretary Mnuchin announced that the tax filing deadline has been extended to July 15, 2020. The IRS has since issued new guidance which replaces the guidance in this piece.)
As the numbers of confirmed cases of COVID-19 continue to increase in the United States, the federal government is taking action to reduce the impact on taxpayers. Specifically, the Internal Revenue Service (IRS) has officially announced that the due date for making tax payments has been pushed to July 15, 2020.
You can read the guidance here (downloads as a PDF).
According to the guidance, on March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration). 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, as appropriate, pursuant to 26 U.S.C. 7508A(a).”
COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to the World Health Organization, as of March 18, 2020, there are 193,029 confirmed cases of COVID-19 in 164 territories and countries. According to Johns Hopkins, the United States has 7,324 confirmed cases with reported cases in every state.
The statute provides:
In the case of a taxpayer determined by the Secretary to be affected by a federally declared disaster (as defined by section 165(i)(5)(A)) or a terroristic or military action (as defined in section 692(c)(2)), the Secretary may specify a period of up to 1 year that may be disregarded in determining, under the internal revenue laws, in respect of any tax liability…
As a result of the Emergency Declaration, any person with a federal income tax payment due April 15, 2020 (the normal tax filing season due date), is eligible for relief. That means that the due date for making federal income tax payments due April 15, 2020, is postponed to July 15, 2020.
- The amount eligible for relief for most taxpayers is up to $1,000,000 regardless of filing status. That means, for example, that the relief is essentially per return, granting the same for a single individual as for married individuals filing a joint return.
- The amount eligible for relief for each consolidated group (as defined in §1.1502-1) or for each C corporation that does not join in filing a consolidated return is up to $10,000,000.
Interest, penalties and additions to tax will accrue on tax in excess of the these amounts due but not paid by April 15, 2020.
- The relief applies to federal income tax payments including payments of tax on self-employment income due on April 15, 2020, for the 2019 taxable year.
- The relief also applies to federal estimated income tax payments, including payments of tax on self-employment income, due on April 15, 2020, for the 2020 taxable year.
- The relief does not extend to the payment or deposit of any other type of federal tax.
The initial relief did apply to the filing of any tax return or information return, but see my author’s note above.