Federal Income Tax Payment and Tax Return Filing Postponement
As a result of the Emergency Declaration issued by the President on March 13, 2020, the IRS released Notice 2020-17 on March 18th giving income tax payment relief for individuals and businesses.
Notice 2020-17 provides that individuals and corporations can postpone the payment of income taxes owed on April 15th that fall below the thresholds of $1 million for individuals and $10 million for corporations until July 15, 2020. The postponement applies to both federal income taxes owed on April 15th as well as to any first quarter estimated income tax payments otherwise due on that date. Only amounts equal to or below the threshold amounts will be eligible for deferral on an interest-free, penalty-free basis. Interest, penalties, and additions to tax with respect to the postponed amounts will begin to accrue on July 16, 2020 if not paid by the July 15th postponement deadline.
Further, on March 20th, Treasury Secretary Mnuchin, at the urging of the President, announced that the April 15th income tax filing deadline would be extended until July 15, 2020.
Both of these developments will provide much needed relief for our clients as they deal with the continuingly unfolding and unfortunate events brought about by the global virus pandemic.
We will be awaiting further authoritative announcements as to how the tax payment and tax return filing postponements will apply to our clients. Additionally, we are closely monitoring what state payment and/or filing relief may also be forthcoming.