Following the announcement made by U.S. Treasury Secretary Steven Mnuchin on the morning of March 20, 2020, the IRS issued Notice 2020-18, which officially and automatically extends the April 15th Federal tax filing and payment deadlines to July 15, 2020, for those individuals and businesses required to file tax returns that would otherwise be due on April 15th.
Days earlier, the IRS issued Notice 2020-17 which extended only the federal income tax payment deadline to July 15th and imposed caps on the amount that was eligible for deferral. These tax payment limits were set at $1 million for individual taxpayers and $10 million for corporate taxpayers.
Under Notice 2020-18, affected taxpayers are no longer required to file an application for extension on Forms 4868 or 7004 and the limitation on the payments that may be postponed has been eliminated.
Notice 2020-18 brings both the tax filing and payment deadlines into alignment.
Important components of Notice 2020-18 include the following:
- Prior guidance regarding the payment extension (pursuant to Notice 2020-17) is superseded and replaced by Notice 2020-18;
- Any person (defined as an individual, trust, estate, partnership, association, company, or corporation) with a Federal income tax payment or Federal income tax return due April 15, 2020, is considered to be affected by the COVID-19 pandemic for purposes of the relief detailed in the Notice;
- The relief provided is granted for all Federal income tax payments and tax payments on self-employment income for Federal tax returns due on April 15, 2020 pertaining to the taxpayer’s 2019 taxable year;
- The relief provided also includes Federal estimated income tax payments and tax payments on self-employment income due on April 15, 2020 pertaining to the taxpayer’s 2020 taxable year;
- Payments or deposits of any other type of Federal tax, or for the filing of any other Federal information return, are not included in the extension;
- Interest, penalties, and additions to tax with respect to postponed Federal income tax filings and payments will not be calculated from the period beginning April 15, 2020 and ending on July 15, 2020, but will begin to accrue on July 16, 2020.
Notwithstanding the extension, if you are anticipating a tax refund, we recommend you plan to file your tax return as soon as possible to claim that refund.
If you have questions about how the extension affects your tax filing and payments, please contact your Untracht Early advisor.