In an effort to offer COVID-19 relief, the IRS is providing an extension to the tax filing deadline. The new deadline is July 15, 2020. This is in addition to the extension to file and pay 2019 and estimated taxes.
On March 18 the IRS issued Notice 2020-17 that allows taxpayers until July 15, 2020 to pay 2019 income taxes and 2020 estimated taxes that would otherwise be due on April 15. Under the notice,
- Anyone with an income tax payment due April 15, 2020 is an “Affected Taxpayer” entitled to an extension to July 15, 2020.
- The extension applies to amounts up to $1 million for individuals and non-corporate taxpayers, regardless of filing status and $10 million for C-corporation taxpayers.
- The extension applies to federal income tax payments including self-employment income for income in 2019 and estimated payments for income in 2020 otherwise due on April 15, 2020.
- As a result of the extension, the IRS will disregard the period from April 15, 2020 to July 15 2020 in the calculation of interest or penalties for failure to pay the income tax subject to the extension.
- The interest and penalty abatement does not apply to in excess of the applicable limits (e.g. over $1 million for individual taxpayers).
- “Reasonable cause” relief may available for penalties due to a failure to pay tax (e.g. for late payments following extension period or for amounts above the applicable limits).
U.S. Treasury Secretary Steven Mnuchin reported today that the extension will also apply to the obligation to file. The IRS is expected to release official guidance extending the 2019 filing deadline to July 15, 2020, as further relief.
For more support and information relating to COVID-19, please visit the Kerr Russell COVID-19 Resource Center. If you have questions relating to this article or other tax matters, please contact a Kerr Russell attorney.
John D. Gatti is a Certified Public Accountant as well as an attorney. He concentrates his practice in the areas of taxation, mergers and acquisitions, business law, real estate law, and estate planning. John alos serves as the firm’s administrative partner and chairs the firm’s Taxation Practice Group. He has considerable experience representing professional services firms. These include accounting, engineering, and architectural firms, as well as insurance agencies, in purchase and sale transactions.
Liam K. Healy has a broad range of experience in business law and business tax matters. His practice in this area includes plan design strategies to achieve the maximum allowable contributions for the business owner clients. He also prepares determination letter applications and represents clients in IRS and Department of Labor audits. Liam also practices in the areas of employee benefits and ERISA. He regularly writes and speaks on the practice of tax and employee benefits law.
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