IRS Formally Extends Tax Payment Deadline

Update: The IRS has extended the federal income tax filing and payment deadlines to July 15, 2020. The IRS has provided additional information on filing and payment here.

On March 18, the Internal Revenue Service issued Notice 2020-17, which provides additional details and important clarifications related to the extended tax payment deadline. In particular, the notice clarifies that the extended tax payment deadline applies to both 2019 balance-due payments and 2020 estimated income tax payments that are due April 15, 2020. The notice also formally extends the payment due date to July 15, 2020.

Here is a summary of what we now know about the extended tax payment deadline:

• The tax payment extension is available solely with respect to federal income tax payments (including payments of tax on self-employment income) due on April 15.
• The extension is available with respect to 2019 balance-due payments and with respect to 2020 estimated income tax payments that are otherwise due April 15.
• The due date for filing tax returns has not been extended. Taxpayers must still file their tax return or their extension by April 15.
• Extended tax payments are due by July 15.
• Corporations can postpone payments of up to $10 million in aggregate. This applies to each consolidated group or to each C corporation that does not join in filing a consolidated return.
• Individuals, estates, and trusts can postpone payments of up to $1 million in aggregate. This applies regardless of filing status.
• Any amounts due in excess of the above limits will accrue penalties and interest from April 15 until the actual payment date.
• Taxpayers that still find themselves subject to penalties and interest after the application of Notice 2020-17, including certain trusts and estates, may seek reasonable cause abatement of such penalties and interest.

Notice 2020-17 provides welcome guidance and clarification for taxpayers. We continue to monitor the situation and will provide updates if any additional guidance is issued.

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