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 announced that the tax filing season been pushed to July 15, 2020.
Today, the IRS issued guidance, making official the announcement tweeted by Treasury Secretary Steven Mnuchin (and subsequently retweeted by the IRS). The guidance makes clear that the due date for filing tax returns and making tax payments has been extended from April 15 to July 15.
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 USC. 7508A(a).”
As a result, the Treasury has announced that the due date for filing federal income tax returns AND making federal income tax payments is automatically postponed to July 15, 2020. You do not have to file for an extension.
And this where words (and details) matter. According to the notice, “any person with a Federal income tax payment or a Federal income tax return due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief.” Also, the term “person” includes an individual, a trust, estate, partnership, association, company, or corporation, as provided in section 7701(a)(1) of the Code.
A strict read suggests that the only returns that are affected are those due on April 15, 2020. That would mean that returns that were due March 16, 2020, as well as those returns due on May 15, 2020, are not included in the relief.
Further, remember those caps? The $1,000,000 in relief for individuals and $10,000,000 for corporations? Those are gone:there is no longer any limit on the amount of the payment that can be deferred.
What that means is that you will automatically avoid interest and penalties on the taxes paid by July 15, 2020. Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020.
The relief only applies to federal income tax payments and federal income tax returns. This includes self-employment income tax for the 2019 taxable year, and federal estimated income tax payments due on April 15, 2020, for the 2020 taxable year.
(The Senate proposal would extend all estimated payments for 2020 to October 15, 2020, but that’s just a bill under consideration.)
The relief doesn’t apply to any other taxes. In other words, there’s no automatic extension for any other type of federal tax or for the filing of any federal information return.
Please also note that this new guidance replaces IRS Notice 2020-17.
And as more tax updates become available, I’ll keep you updated. Keep checking back for details.
