On Tuesday, March 17, Treasury Secretary Mnuchin announced a series of tax relief measures designed to assist taxpayers and tax preparers during the coronavirus (COVID-19) pandemic. On Wednesday, March 18, the Internal Revenue Service released Notice 2020-17 providing further information and clarity on what the extensions of time entailed. The two specific announcements made at the press briefing were:
1. C Corporations can defer up to $10 million in tax payments for 90 days.
2. All other taxpayers can defer tax payments up to $1 million in tax payments for 90 days.
The extension of time covers:
1. Federal income and self-employment tax only
2. Calendar year 2019 income tax returns only
3. Calendar year 2020 first quarter estimated tax payments only
No additional tax returns, tax types, or periods covered are eligible for the relief. Any tax returns originally due on the April 15 date must either be filed or extended, if an extension is normally available.
There will be no late payment penalties or interest on payments that were originally due on April 15 if made by the new July 15 deadline. Interest and penalties will begin to accrue on July 16 for these deferred payments.
We hope this will help you manage your personal or business cash flow and provide some much-needed relief during this uneasy time. Please contact us if you have any questions or want to discuss your tax return filing or payment options.
To read the IRS notice please https://www.irs.gov/pub/irs-drop/n-20-17.pdf
In addition, states are offering relief for tax returns and tax payments due during the months of March-May. The AICPA is keeping track of each state and we are also tracking this. To see the state chart please visit the AICPA website for State Tax Filing Guidance for Coronavirus Pandemic:
As additional information is released or changes we will provide further information.