March 23, 2020
The IRS and the U.S. Treasury Department have been making a series of announcements to provide tax relief in the wake of the coronavirus (COVID-19) pandemic. After previously announcing that taxpayers could defer making federal income tax payments up to certain limits for three months, the IRS has now announced that taxpayers can postpone payments without penalties or interest “regardless of the amount.”
Filing and payment extension
According to new Notice 2020-18, any person with a federal income tax return or payment due on April 15, 2020, has until July 15, 2020, to file a return or make a payment. Specifically, a “person” includes an individual taxpayer, trust, estate, partnership, association, company or corporation. Taxpayers can defer payment of federal income tax (including any self-employment tax) owed for the 2019 tax year from the normal April 15 deadline until July 15. They can also defer their initial quarterly estimated federal income tax payments for the 2020 tax year (including any self-employment tax) from the normal April 15 deadline until July 15.
Previously, the IRS had issued guidance (in Notice 2020-17) stating that corporations could postpone tax payments up to $10 million and all other taxpayers could postpone payments up to $1 million without penalties or interest. In Notice 2020-18, the IRS now states: “There is no limitation on the amount of the payment that may be postponed.”
Normally, when you file an extension, you must still make a good-faith estimate of your tax liability and, by the normal filing deadline, pay the full amount estimated to be due. The relief in Notice 2020-18 is an exception to the general rule.
Taxpayers don’t need to file any additional forms to qualify for this automatic federal tax filing and payment relief. But, if you’re due a refund, you probably still want to file your income tax return as soon as possible so you can receive your money. The IRS stated that “most tax refunds are still being issued within 21 days.”
We’re here to help
Individual states are also announcing state tax relief measures for their residents. Currently, in our local area, Iowa has extended the filing and payment deadline to July 31 and Missouri has extended the filing and payment deadline to July 15. Contact us to learn more about the federal and state tax relief opportunities that are available.
On April 1st, the U.S. Department of the Treasury and the Internal Revenue Service announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment. Instead, payments will be automatically deposited into their bank accounts.
The IRS will use the information on the...
To help mitigate the financial and health crises related to the coronavirus (COVID-19), on Friday, March 27, 2020, President Trump signed into law the largest economic relief package in modern U.S. history. The $2 trillion...