March 19, 2020
As hoped, we now have definitive news from the IRS regarding how we will be filing our 2019 income tax returns and pay the taxes normally due on April 15. Yesterday, the IRS issued Notice 2020-17 which allows us to defer Federal income tax payments until July 15, 2020.
Here is what you need to know at this time:
- Any person, including individuals, trusts, estates, partnerships, and associations, can defer Federal income tax payments due on April 15, 2020 in an aggregate amount of up to $1 million; and corporations, filing as a consolidated group or single C corporation, can defer payments of up to $10 million; until July 15, 2020.
- The Notice applies only to Federal income and self-employment taxes due on April 15, including Federal taxes due for calendar year 2019 and any first quarter Federal estimated tax payments for 2020.
- No extension is allowed for payment of any other type of Federal taxes.
- The Notice does NOT extend the April 15th deadline for filing your Federal individual (or corporate) tax returns. If you cannot file your Federal return by April 15, 2020, you must still request an extension as in the past. The payment of Federal income taxes normally due with your extension or tax return (up to the limits above) can then be deferred until July 15, 2020.
- If filing an extension and anticipate that you will not be able to file your return by July 15, the taxes due must still be paid by no later than that date.
- If full payment is received by the July 15 deadline, no interest or penalty will be assessed, however, interest and penalty will accrue on any payments received after that date. Interest and penalties will still accrue on any amounts over the $1 million/$10 million limits that are not paid in by April 15, 2020.
- Depending on the circumstances, certain taxpayers may be allowed to seek a waiver of relief from penalties. We can assist should this become a concern.
- For Delaware tax filings, the Division of Revenue is expected to follow Federal rules for income tax payment deferral. Most tax returns or extensions are still due by April 30, 2020, and payments can be delayed for up to 90 days.
- We expect other states to provide relief and will let you know as we learn more.
At BLS, we understand what you are going through during these trying times and we will work to assist with your tax filings in any way we can. Should you have any questions or concerns, please do not hesitate to reach out to your BLS Team member.
Please keep safe and know that we are here for you,
Your BLS Team