As part of its overall response to COVID-19, the IRS announced that the due date for both filing federal income tax returns and making federal income tax payments is extended from April 15, 2020 to July 15, 2020.
What Is Covered by the Extension:
- Taxpayers have until July 15, 2020 to file 2019 income tax returns and make income tax payments that otherwise would have been due on April 15, 2020.
- Taxpayers have until July 15, 2020 to make estimated income tax payments for 2020 that otherwise would have been due on April 15, 2020.
- The extension is available for all types of taxpayers, including individuals, trusts, estates, corporations, and any type of unincorporated entity.
- Taxpayers do not have to be sick, quarantined, or otherwise impacted by COVID-19 to qualify for the extension.
- Taxpayers do not need to take any action to obtain the extension to July 15, 2020 – it is automatic – but will have to file for any extension beyond July 15, 2020.
- There is no limitation on the amount of federal income tax that may be deferred under the extension.
- An individual taxpayer who properly estimates their 2019 tax lability and files an extension by July 15, 2020 has until October 15, 2020 to file their 2019 income tax return.
- To avoid the imposition of interest and penalties, an individual taxpayer filing their tax return after July 15, 2020 must pay their properly estimated 2019 tax liability with their extension request (estimated tax penalties will still apply).
- Taxpayers also have until July 15, 2020 to contribute to a 2019 IRA, HSA, or Archer MSA.
What Is Not covered by the Extension:
- The extension does not apply to federal tax returns and payments that are not due on April 15, 2020, which means estimated tax payments for the second quarter of 2020 are still due on June 15, 2020, and tax returns and payments for taxpayers who use a fiscal year rather than the calendar year generally will not be eligible for the extension.
- The extension is generally not available to S corporations, partnerships, and LLCs treated as partnerships because their tax returns were generally due on March 16, 2020.
- The extension does not apply to information returns, payroll tax deposits, excise taxes, or any other taxes other than federal income taxes, but the IRS has similarly extended the due date for filing 2019 gift and generation-skipping transfer tax returns and making payments that were otherwise due April 15, 2020.
- The extension does not apply to claims for refund that are required to be filed by April 15, 2020.
- The extension does not apply to state tax filing and payment deadlines, but many states have issued their own form of relief in response to the federal extension.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.