Extended US Tax day to 15 July 2020 due to the COVID-19 pandemic
The US Treasury Department and the Internal Revenue Service (IRS) announced on 21 March that the federal income tax filing due date is automatically extended from 15 April to 15 July.
Taxpayers will also have until 15 July to pay Federal taxes without penalties and interest.
UPDATED: The IRS have confirmed that the above automatic extension will now apply to Federal gift or generation skipping taxes due on 15 April.
What has changed?
In a response to the coronavirus (COVID-19) pandemic, any person with a federal income tax payment or income tax return due 15 April 2020 is affected by the COVID-19 emergency for the purposes of the tax relief, outlined in the IRS Notice 2020-18, and is an “Affected Taxpayer”.
For an Affected Taxpayer, the due date for filing Federal income tax returns and making Federal income tax payments due 15 April 2020, is automatically postponed to 15 July 2020. The extension is automatic and there is no limitation on the amount of the payment that may be postponed.
The relief only applies to Federal income tax payments (including payments of tax on self-employment income) due on 15 April 2020 and will therefore include Federal taxes due for 2019 tax year and first quarter 2020 Federal estimated income tax payments. There has been no extension to the due date of the second quarter 2020 estimated tax payments that are due on 15 June 2020.
No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.
While Notice 2020-18 is unclear on this point, informational returns, such as Form 8938 (Statement of Specified Foreign Financial Assets) which are generally, attached to and filed with a taxpayer’s annual return, would also, presumably, be subject to the extended deadline of 15 July 2020.
The US Estate and gift tax regimes apply to the transfer of property and the relief given, under Notice 2020-18 only applies to Federal income tax.
UPDATED: Notice 2020-18 has been amplified to allow an automatic extension to 15 July for the filing of Forms 709 (United States Gift and Generation-Skipping Transfer Tax Return) and making payments of Federal gift and generation-skipping transfer tax.
Some states are following the IRS’s lead but taxpayer’s will have to review their state position.
Deloitte's view:
We are glad to see the authorities have taken this step in order to support the taxpayers in this extraordinary situation.
If you would like to discuss more on this topic, please do reach out our key contacts below
Read more about the Deloitte US tax Services.
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