COVID-19 Emergency Tax Relief – The IRS Postpones Certain April 15 Income Tax Deadlines to July 15, and New York State Announces That It Will Follow Suit
Other Tax Deadlines Are Presently Unchanged — Including for Filing Estate and Gift Tax Returns and for Payment of Estate and Gift Taxes
Reacting to the COVID-19 emergency, the IRS on Friday, March 20 issued Notice 2020-18, which postponed to July 15, 2020, the due date for filing income tax returns that are due on April 15, 2020, and for making certain income tax payments that are due on April 15, 2020.
This notice supersedes Notice 2020-17, which the IRS had issued earlier last week. That prior Notice was much less comprehensive in its relief (particularly with respect to the amount of the maximum tax payment deferral) and did not apply to the filing of income tax returns.
Notice 2020-18 provides relief to any “person” with a Federal income tax payment or a Federal income tax return due April 15, 2020, and defines the term “person” to include an individual, a trust, estate, partnership, association, company or corporation.
For such persons (who are referred to by the Notice as “Affected Taxpayers”), the due date for filing Federal income tax returns and making Federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. Affected Taxpayers do not have to file extension Forms 4868 or 7004. Significantly, there is no limitation on the amount of the payment that may be postponed.
There are important limitations on this relief, as the Notice provides that the relief being extended is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.
No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.
As a result of the postponement of the due date for filing Federal income tax returns and making Federal income tax payments from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the Federal income tax returns or to pay the Federal income taxes postponed by this notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax filings and payments will begin to accrue on July 16, 2020.
New York State Will Be Following Suit to Match The Federal 3-Month Postponement to July 15
Governor Andrew M.Cuomo has publicly announced that New York State intends to match the Federal income tax relief. Although as of this writing a formal notice to this effect has not yet been issued by the New York State Department of Taxation and Finance, the New York State Assembly has announced this on its website, which states that “[t]he deadline for filing your taxes has been moved from April 15 to July 15.”
Other Tax Return Filing and Payment Obligations Have Not Yet Been Changed – Including for Estate and Gift Tax Returns and Related Payment Obligations
Other Federal tax return filing and payment obligations, as well as information return obligations, have not yet been changed by the IRS (or may lend themselves to a potential adverse interpretation by the IRS as to whether they have indeed been changed as a result of Notice 2020-18). Stroock lawyers are at the forefront of requesting immediate relief from the U.S. Department of Treasury on such matters in the form of three-month extensions. These include the following:
1. Filing Form 706 Federal estate tax return, and payment of Federal estate and generation-skipping transfer tax (with such relief also to apply to estate tax returns that are already on extension)
2. Filing Form 709 Federal gift tax return, and payment of Federal gift and generation-skipping transfer tax
3. The individual retirement account (IRA) contribution deadline of April 15, 2020
4. Filing Form 3520 (which relates to reporting certain transactions with foreign trusts and gifts from nonresident aliens), and payment of related tax
5. Form 990 and related filings and payment of tax
6. Form 990-PF and related filings and payment of tax
7. Federal income tax filing and tax payment deadlines that are scheduled to occur prior to July 15, 2020 for fiscal year taxpayers such as estates, as well as for other categories of entities (with such relief also to apply to fiscal year income tax returns that are already on extension)
8. Filing Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent
We will continue to keep you updated as new developments occur.
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