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Extension of IRS Filing & Payment Deadline and Removal of Payment Limitation

Tax extension. Folder with documents and clock.Updated March 21, 2020 – Extension of IRS Filing Deadline and Removal of Payment Limitation

Treasury Secretary Steven Mnuchin announced on March 20th that taxpayers will have an additional three months to file their tax returns, to go along with the extension of the payment deadline announced earlier in the week.

Notice 2020-18 was issued later in the day providing some details relating to the extension of the filing deadline.  Importantly, the notice removed the $1 million and $10 million payment limitations that were previously imposed under Notice 2020-17, so there is no longer any limitation on the amount of 2019 tax liability and 2020 estimated tax payment liability that were previously due April 15th and that may be deferred until July 15th as a result of this relief.

Also, the term “person” was defined to include an individual, a trust, estate, partnership, association, company or corporation, as provided in section 7701(a)(1) of the Code. Unanswered questions still remain regarding this relief, and additional guidance may become available.

While this filing (and payment) extension will be a welcome relief to many taxpayers, those expecting a tax refund may still choose to file prior to the original April 15th filing deadline.

See below for original posting announcing the tax payment relief.

Posted March 18, 2020 – April 15th Tax Payment Relief

Treasury Secretary Steven Mnuchin announced on March 17th that individuals and corporations can delay their April 15th tax payments for 90 days due to the coronavirus pandemic. Individuals can defer payment on up to $1 million of taxes for 90 days from the April 15th deadline. Corporations can defer up to $10 million in taxes for up to 90 days. During this time, the IRS will not charge interest or penalties.

Notice 2020-17 was issued on March 18th in follow up to this announcement and which provided further clarification that (1) the relief includes the 2020 estimated tax payment that would otherwise be due on April 15, 2020, (2) payment of tax on self-employment income is included in this relief, and (3) the due date for making these payments is postponed to July 15, 2020. Note that the dollar limitation applies, in aggregate, to all of the tax payments described above for each taxpayer. For corporations, the dollar limitation applies for each consolidated group or for each C corporation that does not join in the filing of a consolidated return.

It is important to note that this relief applies only to the payment of any income tax otherwise due on April 15th, as described above, but that the April 15th filing deadline has not been delayed.

Please contact your tax advisor with any specific questions regarding the timing of your return and the payment of any related taxes.

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