COVID-19 Tax Filing and Payment Relief

The IRS extended the due date for tax return filings and tax return payments for 2019 tax returns due on April 15, 2020 by 90 days. The announcement came on March 20, 2020, just two days after the IRS originally announced that only payments would be deferred. The updated guidelines provide that taxpayers may defer filing and payments until July 15, 2020 without penalties or interest being calculated.

Per IRS notice 2020-18, this relief applies to “Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.” The guidance applies to individuals, trusts, estates, partnerships, associations, companies, and corporations. Additionally, the updated guidance removes the dollar caps originally put in place on March 18, 2020 and provides this relief for tax payments of all amounts.

Some states had already announced relief efforts ahead of the IRS decision. Other states were waiting on the IRS action to decide. So far, Pennsylvania has not released official guidance regarding any extension of the deadline. Additionally, local jurisdictions will have to consider if any relief will be provided.

Key Takeaways for Taxpayers

The situation is very fluid and will be continually monitored by our tax professionals. As we wait for further guidance including state and local reaction to the IRS extension, the important takeaways for taxpayers are:

• Any Federal 2019 tax return due on April 15, 2020 does not have to be filed until July 15, 2020 and is automatically extended without incurring penalties or interest.
• Any Federal tax payment for a 2019 tax return due on April 15, 2020 may be deferred until July 15, 2020 without incurring penalties or interest.
• Any Federal estimated tax payment for a 2020 tax return due on April 15, 2020 may be deferred until July 15, 2020 without incurring penalties or interest.

Brian J. Kutz is a tax manager with Boyer & Ritter LLC. He provides services for businesses and individuals and has worked with clients in various industries. Contact Brian at 717-761-7210 or bkutz@cpabr.com