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Federal Tax Filing and Payment Deadline Deferral

 

In response to the COVID-19 pandemic, the IRS announced in Notice 2020-18 that it is extending the April 15 tax filing deadline for both income tax filings and payments to July 15 to provide relief for taxpayers.

Specifically, the due date for filing federal income tax returns and making federal income tax payments due April 15, 2020 is automatically postponed to July 15, 2020. There is no limitation on the amount of the payment that may be postponed. This postponement applies to individuals, trusts, estates, partnerships, associations, company, and corporations (collectively, “Affected Taxpayers”), and no extension forms (e.g., Forms 4868 or 7004) are required to be filed.

Note that the relief provided is available solely with respect to federal income tax payments (including self-employment taxes) and federal income tax returns due on April 15, 2020 in respect of an Affected Taxpayer’s 2019 taxable year, and federal estimated income tax payments (including self-employment taxes) due on April 15, 2020 for an Affected Taxpayer’s 2020 taxable year. No extension is provided for the payment or deposit of any other type of federal tax (e.g., payroll taxes), or for the filing of any federal information return.

The period beginning on April 15, 2020 and ending on July 15, 2020 will be disregarded in the calculation of any interest, penalty or addition to tax for failure to file the federal income tax returns or to pay the federal income taxes postponed by the Notice.  Interest, penalties and additions to tax with respect to the postponed federal income tax filings and payments will begin to accrue on July 16, 2020.

Currently, the deadline for the June 15 second quarter estimates has not been extended.

State Response

Massachusetts has yet to make an announcement to follow suit but will likely provide similar relief.  A number of other states have enacted extensions, and we will continue to monitor state developments. 

Massachusetts has provided relief for certain small business taxes. This relief includes postponing the collection of regular sales tax, meals tax and room occupancy taxes that would be due in March, April and May so that they will instead be due on June 20. Additionally, penalties and interest that otherwise would apply will be waived. Businesses whose cumulative liability in the 12-month period was less than $150,000 in the 12-month period ending February 29, 2020 are eligible for this relief.

We are closely monitoring the various state jurisdictions to see if they will follow suit. Click here to see how the various states are handling this tax filing deadline at the time of this release.

If you have any questions, please feel free to reach out to a member of the Wolf & Company tax team.