March 19, 2020 Coronavirus Relief

Federal tax payment due date relief

Federal government provides relief in the wake of COVID-19 crisis

Following Steven Mnuchin’s announcement on Tuesday, the Treasury Department issued Notice 2020-17 yesterday providing details of the relief plan.  Highlights are:

  • The due date for making federal income tax payments due April 15th is postponed to July 15th up to $10 million for corporations or corporate consolidated groups, and up to $1 million for individual taxpayers or married individuals filing a joint return.
  • The relief provided applies to federal income tax due on April 15th for the 2019 tax year and to first quarter estimated tax payments for the 2020 tax year.
  • No penalties or interest will apply to the postponed taxes for the period April 15th through July 15th.

Per a special edition of e-news for tax professionals, the $1  million payment postponement applies to trusts and estates as well.

The notice does not provide an extension of time to file returns beyond what is currently allowed under federal law.   As always, an estimate of tax due is required in order to receive a valid extension, even if payment is not required.   Whether this rule will be enforced is another matter.

The AICPA and other industry groups continue to lobby Congress for an extension of time to file and we would not be at all surprised if their efforts are successful.

State relief plans are a work in progress.   As of this writing, Oregon has not extended the payment dates for income taxes or the new Commercial Activity Tax but has indicated it might provide penalty relief under certain circumstances.   The AICPA has posted a chart here summarizing state responses to the crisis to date.

https://www.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/coronavirus-state-filing-relief.pdf

We’ll provide more information as we receive further guidance.   In the meantime, please stay safe and take care of your loved ones.

Zirkle, Long and Associates

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