IRS Tax Relief Overview

On March 13, 2020, President Trump instructed the Secretary of Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).”  

The April 15 due date for filing Federal income tax returns and making Federal income tax payments has been automatically postponed to July 15, 2020 for all persons owing a Federal income tax payment or a Federal income tax return. There is no need to file requesting an extension, nor is there any limitation on the amount of the payment that may be postponed. Likewise, you do not need to be sick or quarantined or have any other impact from COVID-19 to qualify for relief. The only requirement is that you have a Federal income tax return or payment due on April 15, 2020. The emergency relief is available solely for: 

• Federal income tax payments (including payments of self-employment income tax)
• Federal income tax returns due on April 15, 2020, in respect of a taxpayer’s 2019 taxable year
• Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for taxpayer’s 2020 taxable year.

If your taxes require the filing of any of the following returns, your deadline has been extended:

• 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
• Form 8960
• Form 8991

If Form 990-T is due to be filed on April 15, then it has been postponed to July 15 under the Notice. For taxpayers whose Form 990-T is due on May 15, the due date is unchanged. Likewise, returns that were due on March 16, 2020, which include Form 1065, Form 1065-B, Form 1066, and Form 1120-S for calendar year taxpayers, the filing of those returns have not been postponed.

The notice does not extend payments or deposits for any other type of Federal tax (such a Federal Estate Tax filing) or the filing of any Federal information return.

During this “grace period,” the calculation of any interest, penalty or addition to tax for the 2020 tax year will begin to accrue on July 16, 2020. It will be disregarded from April 15, 2020, through July 15, 2020.  Likewise, any tax payments not made by the new deadline will begin accruing interest, penalties, and additions beginning July 16, 2020.Taxpayers should also keep in mind that the extension means that deadline for contributions to an IRA has also been extended. 

The July 15 extension also means that tax payers have additional time to make contributions to their IRAs.  Contributions to an IRA for any particular year can be made at any time during the year or by the due date for filing a return.  Consequently, taxpayers now have until July 15 to make additional contributions to their IRAS. 

For more information see the IRS website and their Relieft for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic Notice 2020-18.