The IRS has provided federal income tax relief for any person with a federal income tax payment due April 15th.
Background:
The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns remains April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can’t file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request a six-month extension to file their return.
Income tax payment relief:
Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.
Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.
This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.
Penalties and interest:
Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.
Applicability:
This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia.
Treasury delays tax filing deadline to July 15
Treasury Secretary Steven Mnuchin on Friday said that the deadline for filing tax returns is being moved from April 15 to July 15.
Should I wait to file?
Mnuchin also encouraged people who might be in line for tax refunds “to file now to get your money.” Typically, about 70 percent of individual tax returns claim refunds.
What about State Taxes?
State filing and payment deadlines vary and are not always the same as the federal filing deadline. The American Institute of Certified Public Accountants (AICPA) is maintaining a State Tax Filing Relief Chart for Coronavirus. To check out the latest developments on state tax filings related to coronavirus click here.
The Bottom Line
Give us a call about how this tax relief may apply to your business.
This information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Hare CPAs + Business Advisors to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or Hare CPAs + Business Advisors or other tax professional prior to taking any action based upon this information. Hare CPAs + Business Advisors assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
