Article written by:
Rich Lundy, CPA
Director, Tax & Business Advisory Services
On Friday, March 20, Treasury Secretary Steven Mnuchin announced that the Treasury Department has pushed back the April 15, 2020 tax deadlines by 91 days, to July 15, 2020. Late that same day, Notice 2020-18 was issued by the IRS to formalize Secretary Mnuchin’s announcement. This Notice restates and expands the relief provided in Notice 2020-17, which was issued on Wednesday, March 18, 2020, and supersedes it. Delaying both the filing and payment requirements will give all types of taxpayers additional time to meet their IRS obligations, potentially lessening cash-flow issues that many are facing.
The due date for filing federal income tax returns and making federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. This applies to all “persons” as referred to in the Notice, including individuals, trusts, estates, partnerships, associations and corporations (including both C and S corporations). Taxpayers do not need to file extensions by April 15th, but will need to do so by July 15th, should additional time be required to complete their 2019 income tax returns.
The payment postponement to July 15th includes 2019 balances due and first quarter 2020 estimated income tax payments, including payments of self-employment tax. There is no limitation on the amount of the payments that may be postponed, and they will be available to taxpayers on an interest-free and penalty-free basis.
The payment extension is part of the federal government’s effort to curb the economic effects of the COVID-19 pandemic. Mnuchin said the delay will free $300 billion of liquidity in the economy as individuals and businesses have more time to pay their taxes.
States and municipalities have been addressing the upcoming tax filing deadlines as well. On March 25, The Ohio Legislature passed House Bill 197 which adopted the federal July 15 extension date, which includes all Ohio school district, municipal income tax and state-administered municipal net profit tax filings and payments. For more details, click here. For additional updates on extended deadlines in other states, please see this resource from the AICPA.
The issuance of Notice 2020-18 provides simplification and a broadening of the benefits of these postponements, as compared to Notice 2020-17. If you would like to review and compare the above information to the original guidance and commentary published by GBQ on Wednesday, March 18th, click here.
Please contact your GBQ representative should you have questions, or if you’d like to discuss the above information in more detail.