On March 11, 2020, the World Health Organization declared that the COVID-19 outbreak was officially a pandemic as rates of infection rose significantly in the U.S. and across the world. On March 13, 2020, President Donald Trump declared a national emergency in the United States. Many states followed suit and issued a number of executive orders that closed down non-essential businesses, restricted travel and compelled many residents to stay in their home until the emergency passes. The Secretary of Treasury is also empowered during a federally declared disaster to extend up to one year any deadlines relating to filing a tax return, paying any tax, filing a Tax Court petition, bringing suit or assessing tax, making a notice of demand, instituting a collection by levy, determining the amount of any credit or refund, or determining the amount of penalties and interest during a tax period. 26 U.S.C. 7508A(a). In response to the COVID-19 crisis, the U.S. Department of Treasury and the Internal Revenue Service provided the following relief beginning March 18, 2020:
- Any taxpayer (meaning an individual, trust, estate, partnership, association, company or corporation) with a federal income tax payment or federal income tax return due April 15, 2020 (for tax year 2019) will have the due date automatically postponed to July 15, 2020. Taxpayers will not have to file any forms to request this postponement and there is no limit on the amount of payment due to be postponed. Any possible interest, penalties or addition to tax for failure to file a return or failure to pay the tax will be postponed during this time. Notice 2020-18.
- Any taxpayer with Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) and any related tax payment due April 15, 2020 is automatically postponed to July 15, 2020. This is automatic and the taxpayer does not have to file Form 8892 (Application for Automatic Extension of Time to File Form 709 and/or Payment of Gift/Generation-Skipping Transfer Tax) to obtain this benefit. However, a taxpayer may choose to file Form 8892 to get an extension to FILE Form 709 by October 15, 2020 (although any tax will still be due July 15, 2020). Notice 2020-20.
- The filing and payment of ALL of the following tax forms and obligations which are due on or after April 1, 2020 and before July 15, 2020 (to cover those individuals operating on a different fiscal year) is automatically postponed to July 15, 2020 (Notice 2020-23):
- All individual income tax payments and return filings (e.g. Form 1040, U.S. Individual Income Tax Return)
- All calendar year or fiscal year corporate income tax payments and return filings (e.g. Form 1120, U.S. Corporation Tax Return and Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations)
- All calendar year or fiscal year partnership returns (e.g. Form 1065, U.S. Return of Partnership Income.
- All estate and trust income tax payments and return filings (e.g. Form 1041, U.S. Income Tax Return for Estates ad Trusts).
- All estate and generation-skipping transfer tax payments and return filings (e.g. Form 706, United States (and Generation-Skipping Transfer) Tax Return and Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent).
- All gift and generation-skipping transfer tax payments and return filings (e.g. Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return).
- Exempt organization business income tax and other payments and return filings on Form 990-T, Exempt Organization Business Income Tax Return.
- Excise tax payments on investment income and return filings due (e.g. Form 4720, Return of Certain Excise Taxes).
- Quarterly estimated income tax payments due for individuals, non-resident aliens, household employees, estates, trusts and individuals. This means that the due date for BOTH Quarter 1 taxes (April 15, 2020) and Quarter 2 taxes (June 15, 2020) is now July 15, 2020.
This relief does NOT cover the following:
- The postponement only applies to income taxes, estate taxes, corporate taxes, excise taxes, gift taxes and generation-skipping taxes for tax year 2019 due April 15, 2020. Other tax years where the taxpayer did not file a return or pay a tax are not affected, so penalties and interest will accrue as normally provided under the Internal Revenue Code. Notice 2020-18.
- This relief does not automatically extend to the failure to timely deposit employment taxes. However, an employer will NOT be subject to penalties for failing to deposit employment taxes relating to Qualified Leave Wages or Qualified Retention Wages under the Families First Coronavirus Response Act. Notice 2020-22.
These extensions do not apply to state and local returns. The 42 states of the union (including Michigan) that require income tax returns will determine their own extensions or other tax relief, if any.
Despite the extended deadlines, taxpayers who are entitled to a refund will receive it earlier if they file their taxes earlier. If you need to get your federal tax returns filed right away, the tax professionals at Kershaw, Vititoe & Jedinak PLC can help. Our tax attorneys are available to assist you during the current COVID-19 state of emergency to get you results quickly. If you have questions about the new IRS tax filing deadlines or any other aspect of federal taxation, then do not hesitate to contact our office today for assistance.