Federal Tax Payment Deadline Extended to July 15, 2020

Click here for information on the filing deadline extension.

Separately from the enactment of the Families First Coronavirus Response Act by Congress on Wednesday, March 18, 2020, the Treasury Department and the Internal Revenue Service (“IRS”) issued Notice 2020-17 to provide special payment relief to individuals and businesses in response to COVID-19. Under the relief, the payment due date for any person with a federal income tax payment due on April 15, 2020 is postponed 90 days to July 15, 2020. With this Notice, there are several takeaways:

Filing Deadline Remains April 15, 2020. Most importantly, this relief does not change the filing deadline of any tax return or information return, regardless of whether the filer is an individual (1040), C corporation (1120), S corporation (1120-S), partnership (1065) or tax-exempt organization (990, 990-PF and/or 990-T).
Affected Taxpayers. The Notice specifically identifies “Affected Taxpayers” as any person with a federal income tax payment due April 15, 2020. Because of the specific date used, the relief is limited to individual taxpayers and corporate taxpayers (“C corporations”). As a result, the Notice excludes tax-exempt organizations that file a Form 990-T, which are due on May 15, to report unrelated business taxable income.
Dollar Limit for C corporation Returns (Form 1120). For C corporation taxpayers, the payment relief applies up to $10,000,000 in the aggregate, and the limit will be applied on a return by return basis (e.g., a consolidated group return will be subject to the same limit as a C corporation filing a single return).
Dollar Limit for Individual Returns (Form 1040). For individual taxpayers, the payment relief applies up to $1,000,000 in the aggregate (including payments of tax on self-employment income), and the limit will be applied regardless of filing status. In other words, the limit for a single individual and the limit for a “married filing jointly” couple will both be $1,000,000.
Estimated Tax Payments. This relief also includes a 90-day delayed due date for first quarter estimated tax payments for tax year 2020 that are due on April 15, 2020.
Interest, Penalty, or Additions. In addition to the payment relief, the Notice provides that no interest, penalty or addition to tax for failure to pay the federal income taxes postponed by the Notice during the period from April 15, 2020 to July 15, 2020.
Filing Extensions Available. For those who can’t file by the April 15, 2020 filing deadline, the IRS is reminding taxpayers that everyone is eligible to request an extension to file their return. Individuals can request a six-month filing extension by electronically filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Corporations must file Form 7004.
States Have Separate Filing and Payment Deadlines. The Notice does not apply to filing or payment requirements under state laws, but several states have provided similar relief. For more information on your particular state, the American Institute of CPAs has compiled and is updating a list of state actions here.

It remains to be seen whether additional relief regarding applicable filing deadlines or other payment due dates may be offered later – such as for tax-exempt organizations, partnerships, trusts or S corporations. Hall Render will continue to monitor and provide you information as it becomes available. Please refer to Hall Render’s COVID-19 Resource Center and hotline at 317-429-3900 for any questions, as well as up-to-date information regarding the virus.

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