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Key Points from the IRS on Filing and Payment Deadline Extensions

Late last night, the IRS issued answers to frequently asked questions in relation to the filing and payment deadline extensions allowed by Notice 2020-18. The entire Q&A can be found by clicking the following link: IRS Filing and Payment Deadline Q&A. We have highlighted some important topics below.

The IRS confirmed who is eligible for the relief:

  • Any person with a Federal income tax return or payment due on April 15, 2020, is eligible for relief under the Notice.
    • “Person” includes any type of taxpayer, such as an individual, a trust, an estate, a corporation, or any type of unincorporated business entity.
    • The payment due refers to both 2019 Federal income tax payments (including payments of tax on self-employment income) and 2020 estimated Federal income tax payments (including payments of tax on self-employment income), regardless of the amount owed.
    • The relief does not apply to Federal income tax returns and payments due on any other date.

For individuals:

  • You do not have to be sick, or quarantined, or have any other impact from COVID-19 to qualify for relief. You only need to have a Federal income tax return or payment due on April 15, 2020.
  • If you have already filed your 2019 income tax return and scheduled a payment as of April 15, 2020, the payment will NOT be automatically rescheduled to July 15. For ways to cancel or reschedule the payment, click on the Q&A link above.
  • The relief does not change the estimated tax requirements or the estimated tax penalty for 2019.
  • Second-quarter 2020 estimated income tax payments are still due on June 15, 2020. First-quarter 2020 estimated income tax payments are postponed from April 15 to July 15, 2020.
  • Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020.
  • The relief does not apply to estate and gift taxes.

For businesses:

  • The relief does not apply to payroll or excise taxes. Normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes.
  • The relief does not apply to filing information returns. Therefore, all Federal information returns, including Form 5498, Form 1099-INT, Form 1099-OID, Form 1099-R, and Form 1099-B, should be filed or extended by their normal due date.
  • The relief does apply to 965 (transition tax) installment payments and to estimated payments for a corporation required to make 59A (BEAT payments).

We appreciate being your trusted business partner and advisor. If you have any questions, do not hesitate to reach out to our tax experts at The Bonadio Group.

The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We therefore make no warranties, expressed or implied, on the services provided hereunder.