3.18.20 | Industry Insights
In the latest reaction to the COVID-19 emergency declaration, the IRS issued a notice extending tax payment deadlines to July 15, 2020 for Federal income tax payments normally due on April 15, 2020. However, as of today, tax filing deadlines have not yet been extended, and taxpayers are encouraged to file their 2019 income tax returns timely, including allowable extensions.
As provided in Notice 2020-17, any person, including an individual, trust, or estate with a Federal income tax payment due April 15, 2020 can defer up to $1 million in federal income tax payments until July 15, 2020 for income tax liabilities ordinarily due by April 15, 2020. The $1 million postponed payment amount is the same regardless of filing status. Thus, both single individual taxpayers and married individuals filing jointly are permitted to defer up to $1 million of postponed tax payments. This relief includes payments of self-employment tax due on April 15, 2020. Corporations can also defer until July 15, 2020 up to $10 million in federal income tax payments normally due by April 15, 2020, for each C corporation or consolidated group.
During this deferment period, the IRS will waive any interest and penalty. Interest, penalties, and additions to tax with respect to late Federal income tax payments will begin to accrue on July 16, 2020 unless there is further government action. Amounts due on account of federal income tax liabilities in excess of these thresholds should still be paid by the original due date to avoid interest and penalties.
No other extension is provided under Notice 2020-17 for the payment or deposit of any other type of federal tax or income tax payments due at any other times, or for the filing of any tax return or information return. Please stay tuned for further developments.