[ Updated March 28, 2020 | 1:00pm ]
Federal measures to mitigate the economic effects of the COVID-19 pandemic continue to roll out. On March 20, Treasury Secretary Mnuchin announced that the federal income tax filing deadline has been extended to July 15, 2020. As of this writing, there are few details concerning the new extension and specific requirements.
According to Mnuchin “All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.” The IRS later clarified this extension includes individuals, trusts, estates, partnerships, associations, and any company or corporation, as provided in section 7701(a)(1) of the Code (including payments of tax on self-employment income).
Gift Tax Returns
In the initial Notice 2020-18 only Fiduciary income tax returns for trusts and estates (Form 1041s) were provided payment and filing relief. Gift tax returns were not. However, IRS Notice 2020-20 released on March 27, 2020 addressed the filing and payment due dates for 2019 gift and generation-skipping tax returns. The due date for filing these returns and making payment is now July 15, 2020. The extension is automatic and a request for an extension of time to file these returns is not required.
IRA, HSA and Employer Contributions
Additionally, Notice 2020-18 clarified that additional time, to July 15, is provided for making contributions to IRA accounts; for HSA contributions; and for employers making contributions to workplace-based retirement plans (where the employer has an April 15 tax return due date).
Taxpayers don’t need to file any additional forms to qualify for this automatic federal tax filing and payment relief. Of course, if you are due a tax refund, we suggest you file as soon as possible to receive your refund.
President Trump’s Emergency Declaration on March 13th that, among other things, instructed Mnuchin to provide relief from tax deadlines for taxpayers adversely affected by the coronavirus (COVID-19) pandemic. On March 17 it was announced by Treasury Secretary Mnuchin individual taxpayers can receive a 90-day deadline extension on paying federal taxes of up to $1 million and corporations can defer tax payments of up to $10 million until July 15, 2020. Those limitations have changed since then. Per Notice 2020-18 issued by the IRS, “There is no limitation on the amount of the payment that may be postponed.” Meaning no payments need to be made to the federal government, regardless of the amount owed.
We will provide additional information as it becomes available. Bear in mind that states aren’t necessarily following suit yet regarding state income tax filing or payments (although some states have announced their own COVID-19 tax relief).
We encourage clients to share their information with us as soon as possible so that we can determine the appropriate course of action in light of possible changes to the final requirements.