(updated 03/18/2020)
On March 17, the Trump administration announced an extension to the April 15 tax payment deadline for all individual and corporate taxpayers. On March 18, the IRS issued Notice 2020-17, clarifying some of the uncertainties that remained after Treasury Secretary Steven Mnuchin’s initial announcement. The extension applies to the first $1 million of taxes owed by individuals (regardless of whether filing single, married filing joint or otherwise) and the first $10 million of taxes owed by corporations or consolidated groups. The $1 million payment extension applies to trusts and estates, as well. The unprecedented move comes pursuant to the President’s national emergency declaration on March 13 related to the novel coronavirus outbreak (the COVID-19 virus). The tax relief postpones the deadlines for paying 2019 federal income taxes and April 15, 2020 estimated taxes until July 15, 2020. “No extension is provided . . . for the payment or deposit of any other type of Federal tax, or for the filing of any tax return or information return,” according to the Notice. The limits indicated above apply to the combined amounts of income and estimated taxes covered by the Notice.
The tax payment relief applies automatically. As Secretary Mnuchin explained during the announcement, “All you have to do is file your taxes, [and] you’ll automatically not get charged interest and penalties.” As a result, individuals and corporations will have until July 15, 2020, to pay the covered taxes (up to the specified limits) that were originally due during this period, generally without penalty. Estimated taxes due after April 15 and before July 15 are not covered by the extension. As the IRS subsequently clarified in the Notice, “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 pay the Federal income taxes postponed by this notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax payments will begin to accrue on July 16, 2020.”
Regardless of this tax relief, we want to assure you that your CBIZ team remains dedicated to providing you with the superior level of service you have come to expect from us, including keeping you informed of late-breaking developments. As always, we are committed to preparing and filing your tax returns in a manner that is both timely and responsive to your needs or concerns.
Should you have any questions concerning these tax filing and payment relief measures, please do not hesitate to contact your engagement team members.
Copyright © 2020, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).