The United States Treasury and the IRS confirmed on Wednesday that individuals and businesses will be allowed to postpone their 2019 tax payments for up to 90 days due to the continuing coronavirus outbreak. This extends the payment due date from April 15, 2020 to July 15th, 2020.
Individuals, which includes pass-through entities (S-Corps, Partnerships, LLCs and Sole Proprietors) that pay taxes through their owners’ tax returns, are allowed to defer up to $1 million in tax payments to the federal government. Corporations can defer up to $10 million in tax payments.
All delayed payments will be interest-free and penalty-free. The deferred payment is automatic.
2019 tax return filing deadline also extended until July 15
It was recently announced that tax filing won’t be due to the IRS until July 15 this year, Treasury Secretary Steven Mnuchin said in a tweet.
- “We are moving Tax Day from April 15 to July 15,” Mnuchin said. “All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
Many states will likely follow suit and also delay their filing and payment deadlines.
The standard extension to October 15, 2020 for filing your 2019 tax return remains available to taxpayers. However, after July 15, 2020 interest and penalty will resume on any balance due.
Note: Glass Jacobson automatically files an extension for all individual tax clients, although it often isn't needed.
The 1st quarter’s 2020 Federal estimated tax payment which is normally due April 15th is also deferred until July 15, 2020. A stimulus package being negotiated in the Senate would move that deadline back even further to Oct. 15.
Note, 2nd quarter 2020 estimated income tax payments are still due on June 15, 2020.
We strongly encourage individuals who can file by April 15 to do so, especially if you are due a refund.
Maryland, DC, VA and other states extend tax payment & filing deadlines
As mentioned, states generally take direction from the federal government on such matters, so you can expect your state to take similar action.
Maryland is following federal guidelines and extending tax payment and filing until July 15th for individual, corporate, pass through entity, and fiduciary income tax payments.
Fiscal year filers with tax years ending January 1st, 2020 through March 31, 2020 are also eligible for the July 15, 2020 extension. The due date for March quarterly estimated payments is extended to July 15, 2020.
Virginia and DC have since extended their deadlines to July 15th as well.
For state rules, please see AICPAs State Tax Filing Guidance for Coronavirus Pandemic (Note: This was last updated on 3/23/20)
Clarifications from the IRS
- July 15, 2020 extended filing and payment deadline ONLY applies to tax returns and federal income tax payments which were originally due 4/15/20. This includes 1040’s, 1041’s and 1120’s and 2020 first quarter estimates.
- 2020 2nd quarter estimates are still due June 15, 2020
- July 15th deadline applies to both contributions to IRA’s and HSA’s which were due by the filing date of your return (which is now July 15th).
- Payroll and excise taxes due 4/15/20 are not included and are still due by original due date.
- If you have already filed and used electronic funds withdrawal can revoke (cancel) their payment. You will need to call the U.S. Treasury Financial Agent at 888-353-4537 no later than 11:59pm ET two business days prior to the schedule payment date.
IRS Frequently asked questions about extended due date for Covid-19
- 2019 income tax payment and filing deadline has been extended to July 15, 2020
- 2020 1st quarter federal estimated tax payment due date has been extended to July 15, 2020
- 2020 2nd quarter estimated income tax payments are still due on June 15, 2020.
- Most states will follow federal payment and filing guidelines.
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