Posted by Abbey Garber
After previously announcing an extension for paying income taxes, Treasury Secretary Mnuchin tweeted this morning that “we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
After the Secretary announced on March 17 that individual taxpayers may defer payments to the IRS of up to $1 million (and corporations may defer paying up to $10 million) from the statutory deadline of April 15 to July 15, without being liable for interest or penalties, the IRS issued Notice 2020-17 with details on the extension. The Notice clarifies that the extension applies to 2019 income taxes due on April 15, 2020, and the first quarterly payment of estimated taxes for 2020, also due on April 15, 2020. Payments will be due on July 15, 2020; if they are not made, penalties and interest will begin to accrue on July 16, 2020. The extension does not apply to any other taxes, such as estate or gift taxes or amounts due under existing installment agreements, for example.
Taxpayers may still obtain a six-month extension for filing their tax returns by applying for an automatic extension by filing Form 4868 (for individuals) or Form 7004 (for businesses). The tax return would then be due October 15, but the deadline for payment would not be extended past July 15.
Many state income tax returns are dependent on the information on the federal return so guidance from those states is expected soon.
Taxpayers who are due tax refunds should file as soon as possible as IRS processing of tax returns will undoubtedly be affected by the COVID-19 pandemic.
If you have any questions, please contact the above author or the T&K tax attorney with whom you regularly work.
Comments