As part of the President’s emergency declaration, the Secretary of the Treasury was instructed “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency.” With that direction, the Internal Revenue Service has issued Notice 2020-17, which extends the due date for the payment of Federal income taxes from April 15, 2020, to July 15, 2020. This includes tax payments that would be due for the 2019 tax year, as well as quarterly estimated income tax payments that would be due April 15, 2020, for the 2020 tax year. The total tax amount that can be deferred is a maximum of $10 million for each Subchapter C corporation, and $1 million for all other taxpayers.
This Notice only applies to income tax payments that are due on April 15, 2020, including payments of tax on self-employment income. Interest and penalties that would normally be charged between April 15 and July 15 are also suspended. The Notice, however, does not apply to any other taxes that may be due between now and April 15 – such as estate tax and payroll taxes.
The tax relief granted by the IRS does not extend the requirement to file a return by April 15th of this year. Therefore, some taxpayers could be in a unique situation of filing a return without a check or credit card payment. Since the Internal Revenue Code imposes interest and penalty for failing to file as well as failure to pay, if an individual does not file his or her return, the individual will still be liable for the failure to file interest and penalty. If you are not ready to file your return by April 15, file Form 4868 to request an automatic 6-month extension.
In addition, the Notice does not extend any filing deadlines for any state income tax returns. To date, neither New Jersey nor Pennsylvania have extended the filing deadline for their state income tax returns, although the New Jersey Division of Taxation and the Pennsylvania Department of Revenue are closed because of the pandemic.