3.23.20 | Client Alert – COVID-19 Update – UPDATED 3.28.20
The IRS issued Notice 2020-18, superseding the prior Notice 2020-17 and expanding April 15 tax relief. Notice 2020-17 generally provided for the deferral of income tax payments due April 15, 2020 of up to $1 million in the case of taxpayers other than C corporations and up to $10 million in the case of C corporations. Filing due dates were not affected under Notice 2020-17.
Pursuant to the new Notice, any person (including an individual, trust, estate, partnership, association, company or corporation) with a Federal income tax payment or a Federal income tax return ordinarily due by April 15, 2020, will receive an automatic extension to both file and pay by July 15, 2020. Taxpayers are not required to file any extension forms to receive this relief.
Moreover, there is no limitation on the amount of the payment that may be deferred, as previously provided in Notice 2020-17. The aforementioned ceilings no longer apply and all April 15th Federal income tax amounts are automatically deferred until July 15, 2020. As a result, all interest, penalty, or additions to tax for failure to file or failure to pay will be disregarded during the period beginning on April 15, 2020, and ending on July 15, 2020. Interest, penalties, and additions to tax with respect to further late filings and payments will only begin to accrue on July 16, 2020.
Please be advised this relief is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns ordinarily due on April 15, 2020 in connection with the 2019 taxable year and 2020 estimated income tax payments due on April 15, 2020. No other extensions are yet available for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.
Accordingly, non-income tax forms and other information returns should be timely filed or separately extended in the absence of further government action.
In addition, federal income tax filings and payments with original due dates other than April 15 are unaffected at this time. This would include individual and business estimated tax payments for other quarters as well as fiscal year corporations and other entities with different filing deadlines, in addition to the aforementioned gift taxes.
Current law provides for extended returns normally due April 15th to be filed by October 15th of the same year. Similarly, taxpayers who need additional time to file beyond the July 15 deadline can request an extension of time by filing Form 4868 or Form 7004, but additional guidance is expected to be released on whether this time-frame extends beyond October 15th.
While New York State has publicly announced that it will follow federal guidelines, no formal guidance has yet been released and its website does not reflect this policy announcement.