90 Days of Relief on Federal Income Tax Filings and Payments

As part of the federal government’s continued efforts to minimize the economic disruptions caused by the coronavirus pandemic, U.S. Treasury Secretary Steven Mnuchin on March 20, 2020, announced that the April 15th deadline for filing individual income tax returns for tax year 2019 has been moved to July 15, 2020.

In addition to relief on the filing deadline, individuals and corporations who owe money to the IRS in connection with their 2019 federal income tax returns now can defer payments during that 90-day period without interest or penalties.

Estimated tax payments due from individuals (e.g., those who are self-employed) for the first quarter of 2020 are now due on or before July 15, 2020.

One Size Does Not Fit All

While the above-described relief is widely available, taxpayers should consider whether or not their particular circumstances warrant taking advantage of these delays. As of today, the IRS has not expressed any view on whether or not tax refunds will be impacted by these changes.

Taxpayers expecting tax refunds should strongly consider filing their 2019 tax returns as soon as possible, as the widespread reduction of our physical workforce across the country will likely impact IRS operations in the coming days and weeks, which may delay payment of tax refunds. Taxpayers may also wish to file an ordinary-course six-month extension, moving the due date of their tax return beyond the new July 15 deadline to October 15. It is important to note, however, that a properly filed extension to October 15 would still require payment on or before July 15, 2020 to avoid interest and/or penalties.

Some States Follow Suit

States are also rapidly making changes to their respective income tax filing deadlines, with some acting independently and others closely following the IRS action. New York, for example, has extended the state tax return deadline to July 15. Taxpayers in certain states, however, may be required to file their state income tax return sooner than the new federal return deadline. Furthermore, many states require information from taxpayers’ federal income tax returns so, practically speaking, the federal deadline extension may be moot for some taxpayers.

Taxpayers are advised to stay in close contact with their accountants and other tax professionals to ensure compliance with applicable guidelines and receive sensible, strategic guidance on tax filings and payments.