Editor's Note: The IRS issued further guidance late on April 9, 2020. You can find that information right here.
Following the president’s emergency declaration on March 13 in response to the ongoing COVID-19 pandemic, the Secretary of the Treasury acted swiftly “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency.”
Filing and Payment Deadlines Extended
Originally, taxpayers saw their payment deadline pushed back to July 15, but more recent guidance supersedes the previous announcement, postponing the income tax filing deadline to July 15 as well. That means, affected taxpayers have until July 15, 2020 to file and make federal income tax payments (including payments on self-employment income). This change is automatic without the need to file an extension request and there is no limit on the payment amount that can be postponed. However, any other non-income federal tax filing and payments that are normally due on “Tax Day” are still due April 15.
As a result of the postponement of the due date, the period beginning on April 15, 2020 and ending on July 15, 2020, will be disregarded in the calculation of any interest or penalties for failure to file the federal income tax returns or to pay the federal income taxes postponed by this notice. Interest, penalties, and additions to tax will begin to accrue on July 16, 2020.
Keep in mind, if you’re getting a refund, experts suggest still filing as soon as possible since the IRS is expected to continue to process tax returns on a rolling basis, even as the COVID-19 pandemic continues to disrupt daily life.
Check Your State Deadline
And, while the IRS is reportedly going to increase pressure to have states align with the new federal deadline, tax payers should take note that this guideline is only in relation to federal income taxes. States will come out with their own statements regarding their state income tax treatments, whether it is to match the postponed federal deadline, keep their original deadline, or something in the middle. It’s important to check with your local government to make sure you do not miss obligations in your state.
CFP®, CPA, Series 7 Securities Registration,1Series 66 Advisory Registration,† Insurance License Brian diligently advises clients on income, gift, trust and estate tax issues while leveraging the expertise of the Roundtable to deliver comprehensive, customized strategies. For more than 10 years he has helped numerous clients develop and implement sophisticated financial, tax and estate strategies that are in alignment with their goals and values. Brian is a...Read More