Update on Deferral of Tax Due Date from April 15 to July 15, 2020

In response to concerns that postponing merely the payment date and not the filing date from April 15, 2020 was at best confusing, the Treasury Department and IRS have relented. Taxpayers now have until July 15, 2020 to both pay their taxes and file their income tax returns that were otherwise due April 15.

On Friday, March 20, Treasury Secretary Mnuchin announced this change, and the IRS issued Notice 2020-18 providing more details.

Under Notice 2020-18, any person with federal income tax payments or returns due April 15, 2020 is treated as an Affected Taxpayer with respect to the COVID-19 emergency. For all such Affected Persons, the due date is automatically postponed to July 15, 2020. As such, the relief is available for individuals, trusts, estates, partnerships, corporations, and limited liability companies.

The relief is limited to federal income tax payments and returns, including self-employment tax due April 15, as well as federal estimated tax payments otherwise due April 15 for the 2020 taxable year. In addition, unlike with the earlier limited relief for payments, there are no monetary limits on the amounts of tax covered by the new COVID-19 emergency policy.

As a result of the relief afforded, the dates beginning on April 15 and ending on July 15, 2020 will be disregarded for purposes of calculating interest or penalties related to any failure to file affected returns or pay affected tax.

Note that additional tax filing and payment relief may be provided under the Stage Three bill currently under negotiation in Congress. Such relief might address some upcoming 2020 estimated tax payments and self-employment taxes, as well as some taxes other than income taxes such as payroll taxes.

Gibbons stands ready to assist with any concerns. If you have any questions regarding tax-related issues, please contact Peter Ulrich. In addition, we will continue to monitor the coronavirus situation and update you accordingly.