Federal Income Tax Filing and Payment Postponements: What You Need To Know

On March 18^th, we shared with you news of the U.S. Treasury Department’s decision to grant a 90-day postponement for individual and C-Corporation income tax liability payments due on April 15^th. As promised, we would like to share with additional guidance recently released by the IRS Chief Counsel Office:

• (UPDATED April 9, 2020) – The postponement will apply to estimated tax payments due on April 15th and June 15th, for the 2020 taxable year. This means any individual or corporation with a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.  For more information, please read IRS Notice 2020-23 on the IRS website.
• (UPDATED March 20, 2020) – Under the new guidance, the IRS deadline for filing a federal income tax return and making a federal income tax payment that would have been otherwise due April 15, 2020, has been automatically postponed to July 15^th. Forms 4868 or 7004 are not required in order to get receive the benefit of this automatic filing postponement.
• (UPDATED March 20, 2020) – Under the new guidance, there is no limitation on the amount of the payment that may be postponed. Any amounts due will not be subject to interest, penalties or additional tax through July 15, 2020. Previously, individual taxpayers were allowed to postpone up to $1 million in income tax liability, and C-Corporations were allowed to postpone up to $10 million in tax liability.
• (UPDATED March 25, 2020) Under new guidance, the postponement allows taxpayers to make 2019 contributions to their IRA by July 15, 2020, the postponed due date for filing their income tax returns.
• This postponement does not apply to the payment or deposit of any other Federal tax, or for the filing of any other tax return or information return, including 990’s.

We know there are still a lot of questions surrounding the guidance, and we will continue to closely monitor the situation. Please be sure to revisit this article for more updates as they become available.

In the meantime, please do not hesitate to reach out to a member of our team with any postponement questions.

Maryland has decided to apply similar postponements to individual and business taxpayers. But not everything is the same. You can read about the similarities and difference in our Maryland State Income Tax Filing and Payments Postponement update.

You can also visit the IRS Coronavirus Tax Relief page dedicated to providing those affected with next steps and important updates.