IRS Q&A Provides Further Details on Filing and Payment Deadline

March 27, 2020

On March 24, 2020, the IRS issued a Q&A related to Notice 2020-18, which extended the deadline for filing income tax returns and making income tax payments from April 15, 2020 to July 15, 2020 due to the COVID-19 pandemic. Under Notice 2020-18, no interest or penalty will be assessed if the return is filed and payment is made by the July 15, 2020 deadline. The IRS Q&A provides further details regarding the types of taxpayers, taxes and filings that are eligible for relief under the Notice. Highlighted below are some relevant points raised in the Q&A.

Qualifying for Relief

To qualify for the relief, you must have a federal income tax return or payment due on April 15, 2020. In addition to calendar-year filers, fiscal-year filers are eligible for the extended due date if the federal income tax return for the fiscal year ending 2019 is due on April 15, 2020, regardless of whether that is the original due date or the extended due date. Filing additional forms, requesting an extension or contacting the IRS is not required to qualify for the relief.

Eligible taxpayers, including individuals, trusts, estates, corporations and any type of unincorporated business need not have been sick or quarantined or have any other impact from COVID-19 in order to take advantage of the relief provided by Notice 2020-18.

Taxpayers that are unable to file by July 15, 2020 can request an automatic extension until October 15, 2020 by filing the appropriate form on or before July 15, 2020, along with an estimated payment of tax due.

What Is Included in the Extended Filing Deadline?

The extension to file applies to the following tax year 2019 forms: Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS, Form 1041, 1041-N, 1041-QFT, Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF, 8960 and 8991. The July 15 filing deadline also applies to exempt organizations filing Form 990-T, if that form is due on April 15. A return due on April 15, 2020 as a result of an extension is included in the July 15, 2020 filing deadline. The due date has not been postponed for taxpayers whose Form 990-T is due May 15.

In addition, the July 15 extension applies to IRC Section 965(h) installment payments that were previously due April 15, 2020; IRC Section 59A (BEAT) payments (Form 8991); contributions to Individual Retirement Accounts and Health Savings Accounts; and the 10% additional tax on amounts includible in gross income from a distribution that was taken from an IRA or workplace-based retirement plan in 2019. There are some legislative changes that are working their way through Congress that may provide additional relief.

The Notice extends to July 15, 2020 the grace period under IRC Sec. 404(a)(6) to make contributions to a workplace-based retirement plan that are treated as made in 2019 for taxpayers with a filing due date of April 15, 2020.

What Is Excluded in the Extended Filing Deadline?

The relief provided in Notice 2020-18 does not apply to payroll, excise, estate or gift taxes and tax returns. Forms 1120-S, 1065, 1065-B and 1066 that were previously due on March 16, 2020 are not included in the extended filing deadline. In addition, no relief is provided for information returns.

Excess elective deferrals made to a workplace-based retirement plan in 2019 must be taken out of the retirement plan no later than April 15, 2020, because the date is not extended under Notice 2020-18.

Second-quarter 2020 estimated income tax payments are still due on June 15, 2020, and no relief is provided for late estimated income tax payments for tax year 2019. Businesses with payment deadlines on May 15 and June 15 are not provided relief under Notice 2020-18. The Q&A does not specifically confirm that the deadline is extended for Forms 5471 and 5472.

In addition, the relief provided in Notice 2020-18 does not apply to state tax liabilities and returns; refund claims for 2016 which must be filed by April 15, 2020; and Form 4466, “Corporation Application for Quick Refund of Overpayment of Estimated Tax.”

The deadline to file Form 3520 is not extended, and taxpayers should file either a Form 4868 or a separate extension request letter by April 15 to extend Form 3520.

Rescheduling Automated Payments

If you have filed your 2019 tax return and scheduled a tax payment for April 15, 2020 through automated payment, you may reschedule the payment through IRS Direct Pay using your confirmation number, or through the Electronic Federal Tax Payment System (EFTPS) using the EFTPS login and the “cancel a tax payment” option. If you have scheduled a payment through an electronic funds withdrawal, you may contact the U.S. Treasury Financial Agent at 888-353-4537 to cancel your payment no later than 11:59 pm EST two businesses days before the scheduled payment date.

We anticipate that additional guidance will be issued by the Treasury and the IRS related to the Q&A and COVID-19 pandemic generally. Marks Paneth will keep you apprised of all forthcoming guidance and changes. You may also visit our Pandemic Resource Center for additional updates and guidance on COVID-19.

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