Treasury Delays April 15th Tax Deadline

Updated: U.S. Treasury Delays April 15th Tax Payment Deadline

On Wednesday, March 18, 2020, the IRS released further guidance on the Treasury’s announcement that it would delay the April 15th tax payment deadline by 90 days. This communication is intended to provide an update to our original March 18, 2020 communication on this matter.

  • The IRS will suspend penalties and interest for up to 90 days for payments related to tax returns submitted by the April 15th filing deadline, giving many individuals and businesses another 90 days – until July 15th – to pay their 2019 income tax bills.
UPDATE:

  • The relief applies to Federal income tax payments including payments of tax on self-employment income due on April 15, 2020, for the 2019 taxable year.
  • The relief also applies to 2020 Federal estimated income tax payments, including payments of tax on self-employment income, due on April 15, 2020, for the 2020 taxable year.
  • The relief does not currently apply to the payment or deposit of any other type of Federal tax.
  • The payment delay will apply to payments as high as $1 million for individuals (intended to cover small businesses and pass-through entities) and $10 million for corporations.
  • At this time, the IRS is not extending the tax filing deadline, so for those taxpayers who don’t file their returns (or an extension) by April 15th, there may still be exposure to penalties and interest.
UPDATE

  • The IRS guidance does not extend the due date for the filing of tax returns or the filing of an extension.
  • For those expecting a tax refund, returns should be filed as soon as possible in order to receive those refunds.
  • Deferment is just a postponement and thus tax payments must still be paid when the deferment period is up.
UPDATE:

  • Interest, penalties, and additions to tax with respect to such postponed Federal income tax payments will begin to accrue on July 16, 2020.
  • Interest, penalties and additions to tax will accrue, without any suspension or deferral, on the amount of any Federal income tax payments in excess of the applicable postponed payment amount due but not paid by a taxpayer on April 15, 2020.
  • The postponement applies to Federal tax returns. While most states follow Federal due dates, many state’s responses are still being formulated. A growing list of state tax filing guidance in the wake of COVID-19 can be found on the AICPA’s website.

If further changes of a substantive nature occur, we will keep you informed. If you have questions about how this deferment may affect you or your business, please contact a member of the MFA Tax Team.

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