Tax Authorities Expand Tax Filing and Payment Due DatesApril 12, 2020
In response to the COVID-19 pandemic, the IRS and most state tax authorities continue to grant relief to taxpayers relating to tax filing and payment deadlines. The IRS recently provided broad relief to taxpayers with tax filing and payment deadlines that fall between April 1 and July 15, 2020. While most states have adopted some, or all, of the Federal extensions, a few states have not yet taken action.
Below are recent updates and highlights of Federal, state and local regulatory actions affecting tax extensions and filing deadlines.
Federal Tax Returns and Payments
Tax Filing and Payment Due Dates Extended
Under Notice 2020-23, the IRS has significantly expanded the scope of previous notices that extended certain tax return filing and tax payment due dates. Taxpayers now have until July 15, 2020 to make tax payments and file Federal tax returns, schedules, elections, informational returns and related forms (filed as attachments) that were due on or after April 1, 2020 and before July 15, 2020. The guidance applies to both calendar and fiscal year taxpayers regardless of the tax year on the form. Previously, in Notice 2020-18, the IRS extended the due date to July 15, 2020 for Federal income tax returns and Federal income tax payments that were due April 15, 2020. IRS Notice 2020-20 provided additional relief, postponing certain Federal gift (and generation-skipping transfer) tax return filings and payments.
The relief in Notice 2020-23 is automatic and applies to returns that were validly extended and due by April 15, 2020. For taxpayers who need additional time beyond July 15, 2020, an extension must be requested by July 15, 2020, but the extension may not go beyond the original or regulatory extension date. The IRS will not impose interest, penalties, or additions to tax for failure to file during the period April 1, 2020 through July 15, 2020.
Estimated Tax Payments
First quarter 2020 estimated tax payments have also been extended to July 15, 2020. Unless further guidance is issued regarding second quarter estimated taxes, a calendar year taxpayer’s estimated taxes for both the first and second quarter will be due on July 15, 2020.
Section 965(h) Transition Tax Payments
The relief includes any installment payments under section 965(h) due on or after April 1, 2020 and before July 15, 2020.
Qualified Opportunity Zones
Notice 2020-23 provides an extension of time to invest eligible gains into a Qualified Opportunity Fund that would otherwise be required on or after April 1, 2020 and before July 15, 2020. If the 180-day investment period ends at any time during this timeframe, the investment period will be extended to July 15, 2020.
The IRS relief includes Form 5500, Annual Return/Report of Employee Benefit Plan, due to be filed (originally or pursuant to a valid extension) on or after April 1, 2020 and before July 15, 2020. This immediate relief does not extend to the calendar year 2019 Form 5500 filings, originally due July 31, 2020.
Specified Time-Sensitive Actions
Taxpayers also have until July 15, 2020 to perform all Specified Time-Sensitive Actions including, filing all petitions with the Tax Court, or for review of a decision rendered by the Tax Court, filing a claim for credit or refund of any tax, and bringing suit upon a claim for credit or refund of any tax. Government actions relating to ongoing examinations, appeals cases, processing amended paper returns, and assessment deadlines, that occur on or after April 1, 2020 and before July 15, 2020, are postponed for 30 days.
State Due Date Extensions
State-By-State Tax Filing and Payment Extension Matrix
Marks Paneth has prepared a matrix highlighting applicable state filing and payment deadlines for corporate and individual taxpayers for all 50 states as of April 10, 2020. Access this document here. This spreadsheet will be continually updated to reflect state changes to tax filing and payment due dates.
Most states have adopted the extended Federal tax deadlines, at least with respect to the filing of 2019 returns and making 2019 tax payments. Certain states and localities have not extended deadlines while others have not extended estimated tax payment deadlines or have adopted deadlines which differ from the IRS. Below are selected jurisdictions where tax filing deadlines have not been extended or where extension deadlines are approaching. Please refer to the Marks Paneth state tax filing and payment deadline matrix for more information on other states, as applicable.
New York City has not extended any filing or payment deadlines for business returns. Returns due between March 16, 2020 and April 25, 2020, which are filed late or paid late may have penalties and interest assessed, although the NYC Department of Taxation and Finance has stated that such filers “may request relief” from penalties (interest will still be charged) on a late filed extension or return, or in a separate request. Accordingly, NYC corporate filers are advised to timely file the proper extension forms, and pay all taxes owed.
New Jersey has not yet officially extended the corporate or individual filing deadlines. Legislation has been introduced on April 9, 2020 to extend filing and payment dates for 2019 tax returns and 1st quarter estimated tax payments to July 15, 2020.
Connecticut Passthrough Entity Tax returns are now due April 15, 2020 for calendar year passthrough entities, but tax payments are not due until June 15, 2020. Passthrough entities with a CT filing requirement should consider filing a protective extension by April 15, 2020.
Florida has not extended the corporate tax filing deadline but recent pronouncements indicate that relief will be available. In the meantime, corporations with a filing obligation should consider filing a tax extension on or before May 1, 2020.
The professionals at Marks Paneth will continue to monitor this situation and keep you apprised of any further developments related to filing deadline extensions. If you have any questions, please feel free to contact your tax advisor at Marks Paneth LLP or email our Response Team. You may also visit our Pandemic Resource Center for additional updates and guidance on the coronavirus (COVID-19).