On March 18, the Internal Revenue Service and the Treasury Department released the formal guidance (Notice 2020-17) on deferring tax payments amid the coronavirus (COVID-19) pandemic.
The guidance allows individual and corporate taxpayers to defer making federal income tax (including self-employment tax) payments due on April 15, 2020 until July 15, 2020, without incurring penalties or interest. This guidance, however, does not change the April 15 filing deadline.
For individual taxpayers, the applicable postponed payment amount is up to $1,000,000 regardless of filing status (same for single and married filing jointly). For corporate taxpayers, the applicable postponed payment amount is up to $10,000,000 for each consolidated group or each C corporation that is not part of the consolidated filing.
Separately, the notice extends the payment deadline to July 15 for 2020 quarterly estimated taxes that would be due on April 15. It is important to note that the applicable postponed payment amounts referenced above include in the aggregate the 2019 and 2020 tax payments, and the interest and penalties will continue to accrue on the amounts of any federal income tax payments exceeding such applicable postponed payment amounts.
Lastly, the notices states that “no extension is provided for the payment or deposit of any other type of federal tax, or for the filing of any tax return or information return.”
Our team will continue to monitor this situation and keep you informed about any relevant updates that impact your business. More tax-related news can be found on our service page. For help guiding your business through the coronavirus outbreak, download our COVID-19 Business Continuity Checklist or visit our resources page.