Updated March 23, 2020
Following President Trump’s emergency declaration over COVID-19, IRS Notice 2020-17 provided that any person will have until July 15, 2020 to make Federal income tax payments that are otherwise due April 15, 2020 without incurring penalty or interest. The Internal Revenue Code defines “person” to include individuals, corporations, and other non-corporate taxpayers, including trusts and estates.
Taxpayers can defer making federal income tax payments until July 15, 2020, without penalties and interest, regardless of the amount they owe. This deferment applies to all taxpayers, including those who pay self-employment tax. They can also defer initial quarterly estimated federal income tax payments for the 2020 tax year (including any self-employment tax) from the normal April 15 deadline until July 15.
The Treasury had previously announced that individuals could defer up to $1 million in federal taxes until July 15, 2020, and non-corporate filers could defer up to $10 million. The “Applicable Postponed Payment Amount” is the same for all individuals regardless of filing status.
Corporations were allowed the same time period for deferred payment of Federal income tax. However, the corporate “Applicable Postponed Payment Amount” is up to $10 million.
But, be careful! Any postponed taxes not paid by the July 15, 2020 extended payment date will be subject to late payment penalty and interest starting July 16, 2020.
To understand how these new deadlines could affect you or your business, reach out to your KraftCPAs advisor.