United States

Extended Income Tax Payment and filing relief due to COVID-19

TAX ALERT  | 

On March 20, 2020, the IRS released Notice 2020-18, which supersedes Notice 2020-17 and provides relief to taxpayers affected by coronavirus disease 2019 pandemic. The notice identifies affected taxpayers as any persons with a federal income tax payment or return due on April 15, 2020. The term person includes individual, a trust, estate, partnership, association, company or corporation, as provided in section 7701(a)(1). 

Notice 2020-17, released on March 18, 2020, provided relief under section 7508A(a) of the Code and postponed the due date for federal income tax payments from April 15, 2020 until July 15, 2020. Notice 2020-18 expands the relief provided in Notice 2020-17 by extending the due date for filing federal income tax returns and making federal income tax payments due April 15, 2020 to July 15, 2020. Such extension for both the payment of tax and filing of the income tax return is automatic and does not require taxpayers to file Forms 4868 and 7004. Unlike Notice 2020-17 which provides limits on the maximum amount of the tax payments that can be postponed, Notice 2020-18 provides for a postponement of an unlimited amount of tax payments. 

The relief is provided only with respect to federal income tax payments (including payments of tax on self-employment income) and for federal income tax returns due on April 15, 2020. The relief is also available in respect to estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an affected taxpayer’s 2020 taxable year. 

In addition, the relief also applies to installment payments of tax deferred under Section 965 of the Code. 

Please note that relief provided in the notice is only for the payment or deposit of income tax. Extension for filing and payment or deposit is not provided for any other type of Federal tax or filing of any federal information return.

During the period of April 15, 2020 to July 15, 2020, no penalties, interest or addition to tax for failure to pay tax or for failure to file federal income tax returns will be assessed against applicable taxpayers. On July 16, 2020, interest, penalties and additions to tax will begin to accrue on unpaid amounts and postponed federal income tax filings. 

State returns and payments are not covered by this relief. Taxpayers should coordinate with their tax advisors to address any state and local tax payment and filing requirements.  

If you have any questions with regards to IRS Notice 2020-18, please contact a member of RSM US LLP, Washington National Tax, or the RSM Tax Controversy team. 

Please read our tax alert about Notice 2020-17.

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