On March 20, 2020, the IRS published Notice 2020-18, clarifying that “Tax Day” for both filing and payment of federal income tax has been moved from April 15, 2020 to July 15, 2020.
As background, in response to the COVID-19 pandemic and the Emergency Declaration issued by President Trump on March 13, the Department of the Treasury was instructed “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).” The Secretary of the Treasury has the authority to postpone tax filing and payment deadlines. Any postponement for up to one year will still be considered “timely” under the Internal Revenue Code and its regulations.
Notice 2020-18 (the “Notice”) provides detail of this relief as of March 20, 2020. Under the Notice, any “person” with a federal income tax payment or a federal income tax return due on April 15, 2020, may postpone both filing and payment of those federal income taxes until July 15, 2020.
For purposes of the Notice, the term “person” includes an individual (single or married filing jointly), a trust, estate, partnership, association, company or a corporation. Taxpayers do not have to file extension elections (Forms 4868 or 7004) in order to receive relief. In addition, there is no limitation on the amount of the payment that may be postponed.
Thus (1) any federal income tax payments, including payments of tax on self-employment income, previously due on April 15, 2020, for the 2019 tax year and (2) any federal estimated income tax payments, including payments of tax on self-employment income, for the 2020 tax year, may now be postponed until July 15, 2020. In addition, no interest or penalties will accrue between April 15 and July 15 on the amounts that would otherwise have been due on April 15. Interest and penalties will begin to accrue on July 16, 2020.
The Notice does not provide for any extension for the payment of any other type of federal tax, or for the filing of any federal information return (such as estate tax and gift tax returns). The Secretary of the Treasury has also encouraged taxpayers expecting a federal income tax refund to file on or before April 15, 2020, in order to receive refunds in a timely manner.
As of March 23, 2020, Massachusetts has not yet issued any postponement of filing or payment deadlines. However, the Massachusetts Department of Revenue’s position, stated on their website, is that “We are working on a plan to provide relief with respect to Massachusetts returns and payments.” We will keep clients updated in the event of any change in the Massachusetts filing and payment obligations.
Please feel free to contact any member of the Tax and Private Client practice groups at Casner & Edwards, LLP with questions.