JUST RELEASED: THE U.S. EXTENDS INDIVIDUAL AND BUSINESS TAX FILING DEADLINE TO JULY 15TH
On Monday, March 17, 2020, Treasury announced a 90-day extension of time to pay taxes owed by individuals and corporations. On Wednesday, the IRS has provided some guidance as to what was included in the extension.
WHAT IS COVERED IN THE 90-DAY EXTENSION OF TIME?
- The relief is available for income tax payments due April 15, 2020. This includes federal estimated tax payments due April 15, 2020.
- Non-corporate taxpayers can defer up to $1,000,000 of tax liability until July 15th, this includes both 2019 and 1st quarter 2020 tax payments combined.
- For individuals, the amount of deferred tax payment is $1,000,000 regardless of filing status. Therefore, a tax deferment amount is the same for a single individual and for married individuals filing a joint return.
- The deferment includes payments of tax on self-employed income.
- Corporations can defer up to $10,000,000 of tax liability until July 15th, this includes both 2019 and 1st quarter 2020 tax combined.
- The extension of time to pay includes only income tax payments. Released March 20, 2020, Individual and Business Income Tax Returns were also extended to July 15.
WHAT IS NOT INCLUDED?
- Amounts due in excess of $1,000,000 should be paid by April 15th to avoid potential penalties and interest on underpayment.
- State filing and payment obligations are not covered by the IRS guidance. Each state is addressing filing and payment obligations at the individual state level. To date the following states have issued extensions:
- Michigan, Colorado, Georgia, Maryland, Massachusetts, Ohio, Oregon treasury departments have said they will mirror IRS guidance however there have been no official pronouncements issued yet.
- California – filing, and payments extended until June 15. Includes quarterly estimated tax payments
- Connecticut – Business returns extended until June 15th, Individuals until July 15th
- South Carolina – Filing and payments extended until June 1, 2020, for individuals and corporate taxpayers. Quarterly estimates were not addressed.
- Many state treasury departments are closed but monitoring the IRS guidance. We will be monitoring changing due dates as announced.
WHAT DOES THIS MEAN FOR YOU?
We recommend providing your information to us as soon as it is available. If you are getting a refund, you can file and receive your refund. For our client’s owing tax, we will be able to get an accurate picture of what will be due come July.