FEDERAL INCOME TAX PAYMENT EXTENSION

Del YounglasCOVID-19, Tax Alert

Tax Alert from Maloney+Novotny

EXTENSION FOR FEDERAL INCOME TAX PAYMENTS DUE APRIL 15, 2020

In Notice 2020-17, the IRS provided guidance about the recently announced extension of federal tax payments due April 15, 2020.  Here are the details of the guidance:

  • Individuals can postpone making their April 15th income tax payments up to $1,000,000 until July 15, 2020. The limit applies in the aggregate to an extension payment for 2019 and an estimated payment for the first quarter of 2020, both of which are due April 15, 2020.  The limit applies to individual taxpayers regardless of filing status (e.g., single, married filing jointly, married filing separately, etc.).  The postponement period also applies to estates and trusts with a tax year-end of December 31, 2019.
  • C-corporations can postpone April 15th income tax payments up to $10,000,000 until July 15, 2020. This limit applies to stand-alone corporations and corporations filing as a consolidated group for calendar year 2019.  The limit applies in the aggregate to an extension payment for 2019 and an estimated payment for the first quarter of 2020.
  • For penalty and interest calculation purposes, the period between April 15, 2020 and July 15, 2020 will be disregarded. Interest and penalties will begin to accrue on July 16, 2020 for unpaid balances.  Additionally, interest and penalties on amounts in excess of the limits mentioned above will accrue beginning April 15, 2020, under existing tax rules.
  • This payment extension applies only to income tax and self-employment tax. Other types of taxes, including payroll taxes, must be made by established deadlines.
  • Taxpayers must still file an extension on or before April 15, 2020 to extend the time for filing their respective income tax returns.

Maloney + Novotny plans to continue to complete all client returns and estimated payment calculations before the April 15th deadline whenever possible.  We will leave it up to clients as to whether they want to postpone making such payments under this program.

Please contact your Maloney + Novotny team member if you have questions, or contact us using this online form.

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